Hibiscus to bloom beyond North Sea

KUALA LUMPUR: Hibiscus Petroleum Bhd has set its sights on expanding its international footprint of oil and gas exploration and production (E&P) in Southeast Asia, besides developing its United Kingdom assets.

Hibiscus, the only listed Malaysian E&P entity, is constantly on the lookout for opportunities in countries with a robust legal system that the company is comfortable dabbling in.

Managing director Kenneth Pereira told Business Times that with its "hub-type concept", Hibiscus is keen on exploring the regional markets.

"Europe, maybe not so much now because we are already in the North Sea. We have a lot of contingent resources, in other words, oil that we have already discovered but not yet developed in the North Sea. So we have a lot of opportunities to develop those assets," he said.

Hibiscus' assets in the UK's North Sea includes the Anasuria cluster, which is one of the company's first producing assets acquired in 2016, as well as Marigold West and Sunflower oil fields acquired in 2018.

On being the only listed E&P company in the country and challenges it faces, Pereira said Hibiscus made it a priority to make sure that the stakeholders are aware of the risks and opportunities.

This includes inviting main investors and fund managers to the company's office to engage with the board of directors as well as the management to understand the nature of the business better.

Oftentimes, he said, analysts did not have a lot of comparable benchmark from the local scene to compare with, and had to seek international companies to conduct analysis.

However, he pointed out the positive side of being the only E&P company is that the entire interested investor base is part of the market exploration.

"If people want exposure to oil prices, we are the only ones. So we've got scarcity value as you know, we're exclusive," he said.

Pereira also highlighted that apart from being the only E&P business in the market, Hibiscus is one of the few companies in Malaysia and the region with no majority and minority shareholders objective.

"This is a good, positive thing that comes out of special-purpose acquisition companies (SPACs). This is something very good that you can really get companies where everybody is a minority and everyone is aligned. We have the same objectives, and everybody is a minority, everyone has the same objective," he said.

Pereira said there were originally five SPACs companies in Malaysia, adding that Hibiscus may be the only one that is still in the market.

Hibiscus became the only sole proprietor within the E&P scope after starting its business strategy towards exploration positions and eventually the production proposition.

This was right after Hibiscus was listed as the first SPAC in Southeast Asia when the oil and gas industry was conducive.

Things changed in 2014 when oil prices fell.

"This kind of coincided with a time when we had just made a discovery in Oman. Back then, it was actually cheaper for us to buy a producing field with the oil prices falling. It had pivoted our strategy into merger and acquisition of a producing asset," he said.

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