KUALA LUMPUR: Deleum Bhd is tendering about RM300 million worth of contracts domestically as oil and gas (O&G) activities had started to pick up across its three core business segments.
Group managing director Nan Yusri Nan Rahimy said the contracts are for power and machinery (P&M), oilfield services (OS) and integrated corrosion solution (ICS) segments.
"The tendering process is still ongoing as we continue to put focus on our three core segments,” he told the New Straits Times recently.
Nan Yusri said Deleum is optimistic on growing its core businesses in the next two years, contingent on stable oil prices averaging about US$60 per barrel.
Stabilisation in oil prices between US$55 and US$65 per barrel range would serve as a catalyst to spur investments and activities by the oil and gas (O&G) majors, he said.
This in turn would trickle down to the service providers and subsequently across the O&G value chain.
Deleum is primarily involved in the exploration, production and after-sales MRO services for the O&G industry.
Further, the group has seen the upstream O&G sector rallying to recover and settle at a new ‘stable’ environment, particularly in the last two to three quarters this year, despite some geopolitical uncertainties and volatilities globally.
"We have been experiencing consistency across the core-based activities including production, drilling and maintenance, repair and overhaul (MRO), which we have not experienced in the last five years since the downturn of the O&G sector in 2014,” Nan Yusri said.
Deleum has secured about RM2.5 billion in orderbook which would provide earnings visibility at least until 2023.
“We foresee our businesses continue to sustain beyond 2020 should the O&G activity levels continue to improve,” he said.
On markets abroad, Deleum is also currently looking to expand its businesses geographically mainly within the region and the Middle East.
“Our geographical expansion is one of our key focus areas to grow our business. We are looking into regional countries like Brunei, Indonesia, as well as the Middle East such as United Arab Emirates, Oman, Qatar and Saudi Arabia.
“We are, however, careful and selective in the countries that we want to penetrate as well as the services that we want to expand because we need to ensure that we can add value to our expansion and to our businesses,” he said.
He said the company was already discussing with O&G operators in the United Arab Emirates, Oman, Qatar and Saudi Arabia to expand into these markets.
“We have already started sourcing out these markets. We have identified our key partners and proceeding with sales and marketing efforts to promote our services,” he said.
Nan Yusri said Deleum is optimistic on the O&G sector in the next two years if the current activity level can be sustained, thus providing opportunities for the company to secure more jobs.