Malaysia's oil company plans bigger capital expenditure in Venezuela
4/7/2008 17:40
Malaysia's oil and gas services firm Scomi Group Bhd plans to increase its
capital expenditure (capex) in Venezuela by up to ten percent this year, buoyed
by a booming oil and gas industry, local media reported today.
As of June
this year, the group has spent some US$13 million on capex in the South American
country, Chief financial officer Syahrunizam Samsuddin said after a presentation
on "Doing Business in Venezuela" by Scomi at the Venezuelan Embassy in Kuala
Lumpur yesterday.
"The increase in capex will be dependent on the nature of
contracts that we receive this year. But the amount will not be significant, as
what we have invested (in the country) so far," the New Straits Times quoted
Syahrunizam as saying.
The group's operations in Venezuela contributed
between five and eight percent to its total revenue last year.
"This is
significant. Venezuela's contribution is larger than our operations in other
countries. Venezuela is one of the top eight countries that we are focusing in
our offshore services business," he said.
The group expects to maintain its
high level of growth in Venezuela this year, Syahrunizam said.
"We want to
maintain the growth momentum, but we also want to grow and build a solid
infrastructure for growth in Venezuela.
"It is not so much that we want to
capture all contracts offered in Venezuela, but deliver our products and
services that we are capable of doing," he said.
Scomi's operations in
Venezuela recorded a net profit of US$3 million on US$23 million revenue last
year. Its first-quarter revenue ended March 31 2008 was at US$5 million, which
is about 25 percent of the total revenue registered for the whole of last
year.
Scomi started its business in Venezuela in 1997 and has since set up
two companies, namely Scomi Oiltools de Venezuela and Pimsa, to handle its
business operations in that country.
Scomi Oiltools handles the drilling
waste management and drilling fluids, while Pimsa, machine shop operations. Its
offices are located in the Ciudad Ojeda, Anaco, Maturin and Barinas
districts.
Started as a solids control services company, Scomi Oiltools
senior vice-president Steve Backer said the company added drilling waste
management to its business in Venezuela.
"We are actively promoting our
drilling fluids business for which we are confident of seeing results this year.
We have invested in inventory and anticipate returns in the 2008/2009 period,"
he said.
Scomi and Petroleos de Venezuela (PDVSA) are currently working on a
unique technological demand for drilling to heavy oil system, which is on a
trial run between three months and six months.
The technologies were
generated from its research laboratories, in which the system will make it
easier to drill, produce and develop heavy oil, Backer said.
"If successful,
it will be a major benefit to Scomi and PDVSA to develop resources in
Venezuela," he added.
Xinhua
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