IB said five segments – drilling, fabrication, offshore support vessel (OSV), pipelines, and maintenance operations – are expected to see an increase in activities this year. — Reuters
PETALING JAYA: Maybank Investment Bank (IB) is maintaining its “positive” call on the oil and gas (O&G) sector amid a more positive picture painted in the Petroliam Nasional Bhd (PETRONAS) Activity Outlook (PAO) 2023-2025.
It said five segments – drilling, fabrication, offshore support vessel (OSV), pipelines, and maintenance operations – are expected to see an increase in activities this year.
“All in, we expect PETRONAS to meet our RM100bil core net profit estimate for 2022,” Maybank IB said in a research note yesterday.
The bank maintained its US$100 (RM440) per barrel (dated Brent) oil price estimate for 2023, with an upside bias.
“We do not rule out a higher oil price outlook in financial year 2023, considering the continued tightness in the global supply market due to the prolonged structural under-investment since 2015 and the Organisation of the Petroleum Exporting Countries and its allies discipline as a swing producer to meet output and price expectations,” said Maybank IB.
Meanwhile, it said demand for oil is projected to pick up in 2023, fuelled by the reopening of China’s economy and increased flights worldwide. A widening imbalance would lead to a higher oil price scenario.
Based on the latest PAO 2023-2025 outlook, Maybank IB said the key beneficiaries of PETRONAS’ domestic activities over the next three years in the five segments poised for increased activities are Velesto Energy Bhd
, Malaysia Marine and Heavy Engineering Holdings Bhd, Icon Offshore Bhd, Wah Seong Corp Bhd and Dialog Group Bhd.
Meanwhile, Kenanga Research in its sector update maintained its “overweight” stance on the O&G sector.
It retained its 2023 average Brent crude oil price assumption at US$80 (RM351) per barrel, adding that global demand is still expected to stay healthy above 100 million barrels per day throughout the year.
“We expect activity levels to stay robust locally on sustained capital expenditure (capex) spending by PETRONAS.
“Similarly, we expect global exploration and production capex spending to continue its upwards trend in 2023, well surpassing pre-pandemic levels,” it said.
Its top picks are Petronas Chemicals Group Bhd with a target price (TP) of RM11 and Bumi Armada Bhd with a TP of 63 sen. — Bernama
