KUALA LUMPUR: CIMB Equities Research is maintaining its Overweight recommendation on the oil and gas (O&G) sector as the Economic Transformation Programme (ETP) newsflow is a potential re-rating catalyst for the sector, along with more contract awards.
It said on Thursday, March 10 the market was excited over the new RM1 billion O&G hub in Labuan and speculation about potential spillovers for selected listed companies including contractors like Muhibbah Engineering and O&G contractors.
However, CIMB Research said it had confirmed with Dialog and Kencana that they are not bidding for the CONSTRUCTION [] portion of the project. The project is not a Petronas initiative and involves a little-known, privately-held company RG Gas and Chemicals.
Furthermore, Dialog and Kencana were focusing on their high-priority jobs in Pengerang and Berantai, respectively, which will commence this year.
'While the new Labuan project may not benefit the listed O&G companies, we welcome the continuous positive newsflow on the sector, which we continue to rate an OVERWEIGHT. SapuraCrest stays as our top pick,' it said.
According to the news, RG Gas and Chemicals is set to invest RM1 billionn over three years to build an integrated O&G hub in Pulau Daat, Labuan which will provide land-based logistics and support services such as fabrication yards and tank farms.
'This is a positive development for the sector in terms of newsflow. Other projects under the ETP that have been awarded include the RM5bn Pengerang tank terminal project for which Dialog is the contractor and developer, and the US$800m Berantai marginal field development involving UK-based Petrofac (50%), SapuraCrest (25%) and Kencana (25%),' it said.
It said on Thursday, March 10 the market was excited over the new RM1 billion O&G hub in Labuan and speculation about potential spillovers for selected listed companies including contractors like Muhibbah Engineering and O&G contractors.
However, CIMB Research said it had confirmed with Dialog and Kencana that they are not bidding for the CONSTRUCTION [] portion of the project. The project is not a Petronas initiative and involves a little-known, privately-held company RG Gas and Chemicals.
Furthermore, Dialog and Kencana were focusing on their high-priority jobs in Pengerang and Berantai, respectively, which will commence this year.
'While the new Labuan project may not benefit the listed O&G companies, we welcome the continuous positive newsflow on the sector, which we continue to rate an OVERWEIGHT. SapuraCrest stays as our top pick,' it said.
According to the news, RG Gas and Chemicals is set to invest RM1 billionn over three years to build an integrated O&G hub in Pulau Daat, Labuan which will provide land-based logistics and support services such as fabrication yards and tank farms.
'This is a positive development for the sector in terms of newsflow. Other projects under the ETP that have been awarded include the RM5bn Pengerang tank terminal project for which Dialog is the contractor and developer, and the US$800m Berantai marginal field development involving UK-based Petrofac (50%), SapuraCrest (25%) and Kencana (25%),' it said.
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