RM1.1bil capital injection a shot in the arm for Sapura Energy’s vendors

 

2,000 vendors will benefit from Malaysia Development Holdings Sdn Bhd’s (MDH) recent RM1.1 billion investment in Sapura Energy.

PETALING JAYA: 

Building a company from the ground up is never an easy task, but it was doubly challenging for engineer Jasmin Ambrose, who launched his subsea technology firm in the midst of the Covid-19 pandemic.

Established in 2020, MyGeo Sdn Bhd started out as a geoscience company before transitioning to an offshore technology services provider after securing partnerships with UK-based oil field equipment supplier Centek Centralizer and consulting firm Gaia Earth Group.

In 2021, it was a RM2 million business. Three years later, it had morphed into a RM10 million business thanks to its niche products and services such as casing solutions and wireline standoff which far exceeded those of local competitors in terms of quality and branding.

“Nobody can match our lead time. Nobody can match our quality of service. We are one of the most expensive companies, but customers always come to us whenever they need tech products to drill complicated oil wells,” Ambrose told FMT.

With its client relations expanding to Vietnam and Thailand, Ambrose, who also worked as general manager of Sapura Energy Bhd, said MyGeo had received recognition and respect from its foreign partners who describe its services as “one-of-a-kind”.

MyGeo’s unique services have also enabled it to secure long-term contracts with multinational oil and gas companies such as Petronas, Shell, and Hibiscus Petroleum.

“We have foreign companies in Malaysia that are competing with us, and we beat them in a lot of the major contracts,” Ambrose said.

MyGeo is one of 2,000 vendors that will benefit from Malaysia Development Holdings Sdn Bhd’s (MDH) recent RM1.1 billion investment in Sapura Energy.

Permodalan Nasional Bhd (PNB), a significant shareholder of Sapura Energy, said the invested funds would be used exclusively and directly to repay the oil and gas firm’s local vendors, many of whom are small and medium-sized enterprises that comprise about 59,000 workers.

Prime Minister Anwar Ibrahim meanwhile has maintained that the investment was not intended as a bailout for the corporation as the government had set several conditions before approving the investment, including requiring the resignations of the chairman and senior management.

Ambrose expressed gratitude for the RM1.1 billion capital injection, which he said could be used to pay back the company’s dues and reinvest in the industry with the acquisition of new assets and the hiring of young professionals.

“We are thankful to the Malaysian Oil, Gas and Energy Services Council, government, and Sapura Energy. With these funds, we can have a bit more capital to acquire assets and hopefully, we will be able to give back to the industry and our customers,” he said.

EXS Synergy Sdn Bhd co-founder Fairuz Yahaya said that a revitalised Sapura Energy would be able to make meaningful contributions to the oil and gas industry.

“We want Sapura Energy to get back on track because we believe that a strong Sapura Energy can provide a very strong ecosystem for Malaysian vendors,” he said.

The explosion protection specialist, which has been a vendor of Sapura Energy since 2016, assists oil and gas facilities in managing the risk of explosion by conducting inspections and maintenance of electrical and instrumentation equipment on board.

It also rents equipment such as generators, load banks, transformers, chillers, and cooling towers to oil and gas companies – a service which Sapura Energy utilised for the construction of the Pegaga gas field offshore from Sarawak in 2018.

The Bumiputera-owned firm became the first company in the world to be certified by the International Electrotechnical Commission under the IECEx 03-4 Scheme in 2017, giving it the competitive edge needed to succeed on the international stage.

“When you want to compete internationally, you need to have something extra.

“Malaysian companies are blessed by the fact that we have a very active oil and gas industry that has been around for more than 40 years,” Fairuz said.

Before the introduction of global governing standards, each country complied with different safety standards for equipment in hazardous areas.

PNB previously said that MDH’s investment was needed to preserve the Malaysian oil and gas industry and maintain the integrity of the supply chain – essential for the continuity of projects that contribute to national revenue and energy security. - FMT