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Digital annual report 2016
Segment Review - Oil & Gas
The Oil and Gas (“O&G”) industry went through one of its most transformative periods in 2016, with the sensational drop in oil prices affecting many companies and consequently redefining the way businesses are run as they tackle costs and prepare to face the challenges ahead. The impact on O&G players worldwide has been dramatic, as oil prices fell sharply over the past two years, with many companies slashing outlays and affecting head count.

The rampant supply and lower global demand coupled with slowing economic growth and, closer to home, the weaker Malaysian Ringgit, had similarly affected Kulim’s O&G Division, though not as severely due to our limited exposure to Exploration and Production (“E&P”) activities and our rather diversified portfolio.
INDUSTRY OVERVIEW


Growth of the Malaysian economy expanded at a slower pace of 4.2% in 2016, compared with 5% growth in 2015, underpinned by the manufacturing and services sector, and as domestic demand helped offset the impact of lower oil prices.

The central bank, Bank Negara Malaysia, however, had cautioned that the economy was likely to face a challenging operating environment going forward with domestic demand to continue driving growth with added support from exports. Investment activities are seen to remain focused on on-going infrastructure projects and capital spending in the manufacturing and services sectors.

Upstream Activities Indonesia

In November 2008, the Indonesian government awarded a Production Sharing Contract (“PSC”) to two (2) subsidiaries of PT Citra Sarana Energi (“PT CSE”) – PT Rizki Bukit Barisan Energi (“PT RBBE”) (formerly known as PT Radiant Bukit Barisan E&P) and PC SKR International (“PC SKR”) - for the South West Bukit Barisan (“SWBB”) PSC. SWBB PSC is located onshore in the West Sumatera Province.




Support Services Malaysia E.A. Technique (M) Berhad

E.A. TECHNIQUE (M) BERHAD (“EA TECH”)

Incorporated in Malaysia on 18 January 1993, EA Tech was listed on the Bursa Malaysia Securities Berhad on 11 December 2014. The company is a marine vessel operator with its principal activities in marine transportation and offshore storage of O&G, provision of marine port services and marine engineering services. It also has a shipyard to support its vessel operations in terms of shipbuilding, ship repair and minor fabrication. 

The company aims to be one of the major shipping companies in Malaysia with a strong culture of safety, quality and security well-embedded in the organisation.

The company is engaged in the provision of port marine services for petrochemical and bulk and container ports in Malaysia. The types of port marine services that EA Tech     provides at the ports include, among others:
  • Towage services, comprising towing, pushing or maneuvering vessels; and
  • Mooring services, which involves securing a marine vessel to specially constructed fixtures such as piers, quays, wharfs, jetties, anchor buoys and mooring buoys
EA Tech also provides dockside mooring services where mooring personnel will secure vessels to floating structure and fixtures at the wharf.

The company’s marine engineering services are divided into two (2) segments, i.e. provision of marine engineering solutions and shipbuilding and ship repair activities. The former encompasses the provision of marine engineering solution and Engineering, Procurement, Construction, Installation and Commissioning (“EPCIC”) activities, whilst the shipbuilding and ship repair activities provide internal support to its marine vessel operations.

EA Tech also undertakes the mirror fabrication of steel structures in its shipyard. The steel structures that the company fabricates are mainly for marine vessels, such as helipad, flare stack, skids and piping systems.


Danamin (M) Sdn Bhd (“DANAMIN”)

Established in 1994, Danamin is a company involved in provision of reliable, high quality, cost effective and technology-driven Engineering, Non-Destructive Testing (“NDT”), Quality Assurance, Asset Integrity Management and Inspection services. Danamin is led and managed by a group of Malaysian professionals, focusing on niche activities within selected specialised industries such as Oil & Gas, Marine, Petrochemical, Refinery and Pipeline.

Danamin’s branches are strategically located to allow its team of experts to be based in the vicinity of its customers’ facilities to support their inspection needs. Currently Danamin has a team of more than 300 professional employees with relevant certification.

Danamin’s vision is to become a preferred and successful company by continually providing excellent service in the O&G industry and by complying with internationally recognised standards, such as ISO 9001:2008 for NDT, Heat Treatment (“HT”) & Steel Structure Fabrication, ISO 14001:2008 and OHSAS 18001:2007 for NDT & HT; class certified societies BV.
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