It is reported that Dayang is set to secure three packages of the multi-year Pan Malaysia MCM hook-up and commissioning (HUC) tender.
PETALING JAYA: Dayang Enterprise Holdings Bhd
is in a favourable position to clinch the decommissioning jobs in Sarawak from Petroliam Nasional Bhd (PETRONAS) by next year.
Hong Leong Investment Bank Research said based on its checks, the decommissioning of oil and gas field structures in Sarawak would be about RM1.4bil, while both Sabah and Peninsular Malaysia amounted to RM1bil in total.
Three major decommissioning packages each for Sabah, Sarawak and the peninsula from PETRONAS would be up for grabs, according to the research house.
“We view Dayang as the frontrunner to clinch the Sarawak package.
“Official awards are slated to occur in the second half of 2025 (2H25) and works will commence from 2026 to 2028.
“We believe that the project margins of these decommissioning jobs are generally higher than the Pan Malaysia maintenance, construction, modification (MCM) packages.”
Meanwhile, it was reported that Dayang is set to secure three packages of the multi-year Pan Malaysia MCM hook-up and commissioning (HUC) tender.
However, Dayang said it is unable to confirm on the sum or specific packages the company is slated to secure as the official letters of awards (LoAs) have yet to be given out.
The LoAs are expected to be awarded by the end of this month or early November.
The submitted rates will remain until end of the firm tenure in 2029 and subject to further negotiation entering the option period.
The value of each package ranges from RM300mil to RM2bil, totalling RM8bil to RM10bil for all 18 packages.
“We gather that bid rates submitted by Dayang are somewhat similar to its existing ones, with a decent project margin buffer.
“The margins are likely to be thin for other small packages, especially the peninsula ones, due to competitive bidding among the smaller contractors.
“We note that very few contractors have the scale of Dayang, in terms of working cap and capacity, to take over the larger packages,” it added.
The research house, which was maintaining its “buy” call on the stock with a target price of RM3.22, however, did not foresee significant impact on its earnings base as the MCM-HUC packages are replenishment in nature.
