KUALA LUMPUR: Oil and gas service provider Sapura Energy Bhd expects all three of its operations - engineering and construction (E&C), exploration and production (E&P) and drilling, to be profitable in the next 12 months.
Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin said the positive outlook will be driven by the recovery of activities in the oil and gas space.
He said the company is optimistic in returning to the black when assets utilisation of its drilling and E&C business crosses the 70 per cent mark. Currently, its drilling division's rig utilisation is at 50 per cent.
“We are still under-utilised so we need to push utilisation in the rigs (drilling) and E&C as we see activities are picking up. I am confident the three of our operations will be profitable in the next 12 months," he told reporters after the company’s annual general meeting, here, today.
Year-to-date, SEB has secured RM2.8 billion contracts.
Shahril said the group aims to secure RM3 billion in new projects for the remainder of the financial year, which will likely increase its orderbook up to RM22 billion from RM17.2 billion recorded in the financial year ended January 31, 2019.
He also expect crude oil price to sustain at US$60-65 a barrel level for the next two years on the back of global growth which will provide opportunities for contracts.
On capital expenditure, Shahril said the group is allocating between RM200 million and RM300 million, if it wins new drilling contracts. Currently it is bidding for to complete the construction of some of its rigs.
On another note, Shahril expects the renewable energy business to contribute 10 to 15 per cent towards its revenue in the future.
The group is actively bidding for projects in the renewable energy sector overseas, mainly in Europe.
With oil major Petroliam Nasional Bhd actively venturing into the renewable energy sector, Shahril said Sapura Energy, as an oil and gas services provider, is also preparing itself to better able serve the industry's needs.