Personally though I think the current oil price is the new norm for the next few years. China cannot maintain its growth and oil consumption much longer so the glut in supply will continue. There's also a potential lifting of the US crude export ban in the future. $80 per barrel will probably be considered the new high with the average hovering between $50-60.

I'd love to be wrong though

AmResearch pegs buy call on KKB Engineering

Posted on January 3, 2015, Saturday

KUCHING: AmResearch Sdn Bhd (AmResearch) reiterated its buy call on KKB Engineering Bhd (KKB) as the group is said to be a possible frontrunner for the engineering, fabrication and procurement of one of Canadian player Talisman’s Kinabalu deep wellhead platforms.

KKB could possibly be among eight Malaysian fabricators in the running to provide the services to Talisman for the fabrication of the 3,000-tonne platform, which includes process modules, it said in a note yesterday.

“The current lowest bid that is five per cent lower than those of the others, which include SapuraKencana Petroleum Bhdand Malaysian Marine & Heavy Engineering Bhd,” iut added.

It is said that Talisman was evaluating KKB’s track record as the Kinabalu wellhead platform will be at a high-pressure, high-temperature zone.

The platform and associated pipelines will be linked to the existing infrastructure.

To note, Talisman holds a 60 per cent stake in the Kinabalu oil production sharing contract, which is a mature oilfield off Sabah.

“We believe the speculated contract value includes associated works. Our O&G order for KKB is conservative at only RM80 million for each of FY15F and FY16F, and at RM130 million for FY17F. Our net profit margin assumption is at 14 to 15 per cent.

“Regardless, we still expect the contract value for the wellhead platform to be substantial, possibly in the region of between US$60 million and US$80 million.

“We view this development positively. It is tangible evidence that KKB is able to compete based on pricing, with the advantages of its geographical operations in Sabah and Sarawak.”

“We expect the award winner for this 12-month contract to be announced by 1Q15, as well as for most of KKB’s 43 per cent-owned associate Oceanmight Sdn Bhd’s RM960 million bids for O&G fabrication jobs.”

AmResearch pegged KKB Engineering with an unchanged fair value of RM2.05 per share by virtue of its assocuat OceanMight Sdn Bhd’d oil and gas fabrication potential in Sarawak.

Read more: http://www.theborneopost.com/2015/01/03/am.../#ixzz3NvwkPQIC

What is the break even for Shell Malaysia in terms of USD per barrel of crude oil? Some one told me mid 40s.

Gumusut Kakap Shell's biggest project in Malaysia has a breakeven price of between 30-40USD p/bbl. Their downstream has been making losses for a couple of years now. Shell as a group generally has been losing profit over several years already.

Point 1 is not global media said, it is the Saudi's ministry of oil who mentioned it from the last OPEC meeting.The main target is shale producers in the US which now is the world no.2/3 oil supplier. Estimates is around 2mil bbl/per day(no one is able to confirm but bloomberg analyst estimated) more than demand go figure what will happen to the price.

Point 2, you have 0 understanding on how America's monetary policy works. QE is there for a reason, see what happened in Malaysia throughout 2014, I bet EPF did not declare it capital loss from the Malaysian market.

This post has been edited by BillySteel: Jan 5 2015, 06:50 PM

For your point 1 there are 2 theories by the "global media" both our points are 2 of them.

For your 2nd point. Since you are so enlighten. What was QE for? Besides to provide liquidity? And QE to you is good I suppose.

So looking at the above screen shot. Earning pershare for Shell have been negative since 2011. Hence can we conclude Shell Malaysia group has not been making money since 2011?? As you can see 2014 was the most negative year for their EPS since the 2008 crisis.

I am curious to know:

a) Why even with favorable oil price last few years Shell Malaysia been losing money?
b) Why wait until now to shed jobs? Shouldn't they restructure much earlier to be more resilient at lower oil price?
c) What is the rational of keeping up money spending activities offshore in the face of negative earnings the last few years? (I know their activities offshore)


Thanks
Bin

This post has been edited by Binyamin: Jan 6 2015, 11:30 AM

hi.. just wanna ask if anyone know company name MCS subsea solutiuons?

Brother,

1&3. Only the Downstream Business(Refinery, Lubricants, Trading, Retail) is listed in the Bursa. Upstream activities are held by 2 asset companies, SSB and SSPC, which are private companies. Regardless of oil price, if your refining margin is narrow, it is very hard to make money. Moreover, the plant in PD is very old and need costly upgrades to keep the cost low.

2. There were already a reorganization world wide when the previous CEO took the helm in 2009-2010. And another re-org in 2012-2013

This post has been edited by yunodie: Jan 6 2015, 05:06 PM

Thanks for the clarification, however I don;t recall any restructuring of Shell in Malaysia between 2012 and 2013. So I assume it didn't happen in Malaysia.

It is a inspection company for subsea pipeline, platform etc.

Not sure whether they did any reorg on the upstream part. But IT & business side, yeap, they did reorg, now it's called SBSC instead of siti.

I just got an interview offer from them.any tips?

anyone mind to share the experience being offshore?just being curious.......

As they are global player, they can do something about the cost, same goes to Exxonmobil last time. There been rumours since last year about Shell, but me still wait n see. keep hearing from my friend inside and contractors

"Phising" work by one of the project bidders!

I wonder how they knew their bid was "5%" lower than the main fabricators.

And actually there are no new pipelines in the project.

http://www.thestar.com.my/Business/Busines...ture/?style=biz
Petronas now are on the right track, if they really walk the talk(on cutting OPEX).

Only the refinery are listed, other business are not listed as they are still making money.

hoo last few posts all economics , hard core to it.

well, what to do as the wheel spins, ada masa atas, ada masa bawah. i guess staying positive, working hard will get us trough. not to mention keep your own level of expenditure on check and dont forget that piggy bank.

hoping there will be no major recession of sorts and good fortune and good economic boom for all.

Man, reading that gave me the rare WTF moment.

So meaning they public list it to share the lost with other investors.



So can I say that SSPC and SSB will sell oil to the refinery at a price to maximize their own profit and then Shell refinery which is public listed will buy it from them at prices set by them but have to sell at market price with a lost? Is that why they have been in a losing business all these years? Screwing the public investors and making money in the other 2 private company instead? I hope that's not the case. But F***, sounds like what a mega oil company will do.

This post has been edited by Binyamin: Jan 7 2015, 02:27 PM

hi, would interested to know what software/website you using for that screenshot, wanna do research on stock market, thank you.