Yinson Holdings Bhd sees the African continent offering good long-term growth prospects for the company’s oil and gas (O&G)-related services.
Chairman and managing director Lim Han Weng (pic) said the O&G exploration and production activities would create demand for the usage of the floating, production, storage and off-loading (FPSO) units there.
“Africa accounted for 24.3% (38 units) of the total 156 units globally, placing the region in second place,” he told reporters after the company’s EGM yesterday.
At the meeting, shareholders approved the proposal to acquire the entire shares of Norway-listed Fred Olsen Production ASA (FOP) for RM551.34mil.
They also approved the proposed issuance and allotment of 37.809 million new ordinary shares of RM2.82 each in Yinson to Kencana Capital Sdn Bhd, which is the private vehicle of Datuk Mokhzani Mahathir.
Lim said the competition within the African market was intense, with a number of international and domestic firms within the industry.
He said Nigeria and Angola dominated the West African region and Gabon in sub-Sahara Africa’s O&G exploration and production activities.
“The three countries hold the largest proven oil reserves, which include gas condensate, natural gas liquids and crude oil,” he said.
Executive director Lim Chern Yuan said acquiring FOP and turning it into a wholly owned subsidiary would place Yinson in a better position to compete globally in the FPSO market.
He said the exercise would allow the company to explore more business in Africa, South America and Asia due to FOP’s extensive networking.
“With FOP coming into our stable, Yinson would be one of the top-six FPSO providers in the world and the only two firms from Malaysia in the elite club,” said Chern Yuan.
He said the ranking would be achieved via the acquisition, which is expected to be completed by the end of next month.
The other Malaysian company is also a Bursa Malaysia-listed company, while the rest are from Japan, Europe and the United States.
Chern Yuan added that the company’s FPSO and floating storage off-loading unit (FPO) order book would swell to RM8bil post-acquisition and keep the company busy until 2019.
“We would continue to bid for more jobs in the FPSO and FPO segments and would only go for quality tenders instead of simply bidding to add to our order book,” he said.
Chern Yuan said with 10 jobs in the world yearly for the six FPSO and FPO providers, the pie was large enough to be shared by each of them.
FPSOs are essentially floating oil production centres. An FPSO is used to receive and process raw oil from a nearby drilling platform.
The oil is stored in the vessel and then offloaded onto a tanker or through a pipleline.
