OSV owner inks charters with Malaysian oil majors as capex spending is expected to increase
Kuala Lumpur, Malaysia-based shipbuilder Nam Cheong Limited reported that its indirect subsidiary SKOSV Sdn Bhd has secured long-term chartering contracts for two anchor handling tug supply (AHTS) vessels and one platform supply vessel. The contracts with Malaysian oil majors are worth approximately US$19M. If exercised, an option would increase the value of the charter by about US$12M.
In a Singapore stock exchange filing, Nam Cheong reported that the three vessels will be used to support floating LNG facilities and other production operations in Malaysian waters until 2022, with the optional extension period running until 2024. The contracts are expected to contribute positively to Nam Cheong’s financial performance from 2019 to 2022.
With the additional contracts, the group’s chartering orderbook will grow to about US$71M, including extension options of US$34M.
Nam Cheong chief executive Leong Seng Keat said, “With the OSV industry steadily gaining pace, our focus for growth now shifts to our 32-strong fleet as we bolster our chartering operations to capture the gradually recovering market.”
In a message to shareholders in the company’s most recent annual report, Nam Cheong executive chairman Tan Sri Datuk Tiong Su Kouk pointed out that Malaysian energy company Petronas plans capex of US$12Bn in the Malaysian oil market in 2019, up from US$11.2Bn in 2018. Of the total amount, US$7Bn will be allocated for upstream activities, a move that is expected to benefit local oil and gas service providers.
According to the Petronas Activity Outlook 2019-2021, a positive outlook is expected for AHTS vessels, PSVs, accommodation and maintenance vessels because of increased drilling and development activities.
Demand for accommodation and maintenance vessels is expected to rise because of an increase in brownfield hook-up and commissioning programmes.