Home | News    Saturday 29 July 2006

Malaysian firm claims US$200m for Sudan oilfield works


July 29, 2006 (KUALA LUMPUR) — Malaysia’s RANHILL Bhd, the country’s largest engineering group, is claiming as much as US$200 million (RM734 million) for work done on an oilfield in Sudan, sources familiar with the matter said yesterday.

They told the Malaysian Business Times that a variation order (VO) claim was forwarded in the second quarter of the year to PetroDar Operating Co Ltd, which had awarded the exploration contract to Ranhill.

Ranhill’s major shareholder and president, Tan Sri Hamdan Mohamad, will lead a high-powered team next week to the African state for further talks on the VO claim, the sources said.

The claim is important to Ranhill as it almost matches the contract value, and also because the company had used its own resources to complete the job.

Awarded in 2004, with a contract value of US$239 million (RM877 million), the project centred on building production and processing facilities in a Sudan oilfield.

PetroDar, 40 per cent owned by Petronas Carigali Sdn Bhd, awarded the project in the Melut Basin Oil Development Project, in south-east Sudan, to the Ranhill and Petroneeds Services International of Sudan joint venture, in which Ranhill holds a 55 per cent stake.

PetroDar’s other owners include China National Petroleum Co, Sudapet Ltd, Gulf Oil Petroleum Ltd and Al Thani Corp.

The Melut Basin contract, which stretches for slightly more than two years, includes the construction of base camps and a 250km water pipeline.

Getting paid would help the company’s bottom line next year.

For the financial year ended June 2005, Ranhill posted revenue of RM1.49 billion, as opposed to revenue of RM792.9 million in the previous financial year.

Despite the increase in revenue, net profit for 2005 tumbled to RM33.1 million from RM48.4 million a year ago.

"Ranhill had two choices. To proceed with work or to stop work. They chose the former," said a source who is privy to the negotiations.

The company decided to complete the job for several reasons, among which are the need to protect the Ranhill brand name and because it wants to be a long-term player on the African continent.

It recently said that it was looking to tie up with some power-related contracts in Uganda.

The Ranhill group, controlled by Hamdan, has been actively expanding overseas in the last couple of years as construction jobs in Malaysia slowed down and operating power stations in the country became less attractive financially.

(Business Times)

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