Saudi Arabia: Kencana Petroleum Project Could Start Earlier
|
|
|
|
Friday, 01 August 2008 |
|
Kencana Petroleum of Malaysia may be able to set up a fabrication yard in Saudi Arabia earlier than expected due to a visit by Aramco
officials in March 2008 to the Company's Lumut yard in Malaysia.
Kencana Petroleum is going into the Saudi Arabia market in partnership with Al-Muhaidib, a group founded in 1946 that has interests in building and construction and food and retail. Al-Muhaidib is a registered contractor with Aramco. The plan of the Kencana Al-Muhaidib joint venture is to operate a yard in Dammam.
CIMB said that yard operations had high barriers to entry as it typically took at least two years for a yard owner/operator to convert a piece of bare land to a well-equipped yard. The availability of labour with technical skills further raises the entry barrier. It took Kencana eight years to build up the acreage and capacity that it now has.
The Company currently employs 4,000 workers at the Lumut yard. If everything goes according to plan, Kencana's will be the first of the six Petronas-licensed fabricators to operate a yard outside Malaysia. Aramco which currently produces 8m bpd plans to increase production to 12m bpd by end 2009.
PetrolWorld 310708
|
