U MW to set up oil tubular pipe plant in India

Jun 13, 2007 02:00 AM

U MW Holdings plans to expand its oil and gas business by setting up an oil tubular pipe plant in Hyderabad, India, in two years' time, group managing director Datuk Dr Abdul Halim Harun said. He said the move was important to position the group as an international player and to cater for the growing demand by the industry.
"We are currently fine-tuning the figures (investment) as we are looking to acquire the best machinery and equipment over there," Abdul Halim said. "What I can say right now is that it will be a substantial investment," he told at the launch of a new jack-up rig called NAGA 2.

He also said that the new plant, which will duplicate the operations of the group's plants in China, will be capable of producing around 220,000 tons of tubular pipes per annum.
U MW's oil and gas division comprises four core business units -- tubular and OCTG (oil country tubular goods), drilling and workover, operations and maintenance, and trading. It has five plants in China on a joint venture basis which are able to produce more than 500,000 tons of tubular pipes annually.

The group has invested over RM 200 mm in China and managed to penetrate the country's pipe manufacturing and coating, repair and maintenance, and trading sectors, Abdul Halim said.
"Our order book in China is very strong as demand for the pipes is tremendous, causing our plants in China to run at full capacity currently. We need to cater for this," he said.

On the new NAGA 2, Abdul Halim said the rig would be delivered in the third quarter of 2008. He said the rig would be contracted out to oil companies in South-East Asia for their offshore exploration and development activities.
"We are currently in talks with all major oil drilling parties and we are confident of getting them to use the rig. Hopefully, we can clinch some deals before delivery time," he added.

NAGA 2, currently under construction in Batam, Indonesia, at a cost of $ 176.5 mm ($ 1.00=RM 3.40) is a new generation jack-up rig with the capability to drill up to 350 feet water depth and 30,000 feet drilling depth. The rig is jointly owned by U MW and Standard Drilling Far East Pte of Norway.
With demand in the oil and gas sector growing, Abdul Halim said the group planned to build another rig called NAGA 3 by 2009.
"With NAGA 3 we will also be involved in a joint venture with the same Norwegian company," he said, adding that the new rigs would contribute to the group's revenue moving forward.

U MW's NAGA 1, jointly owned with Japan Drilling Company Panama, is currently deployed in waters off Sarawak. Abdul Halim said with the operations in China and oil and gas exploration jobs in hand, the oil and gas division is expected to reap significant revenues within three to four years.
"Within that period, the division is expected to become second major contributor to the group's revenue after the automotive business," he said. Last year, the oil and gas division registered a pre-tax profit of RM 271 mm as against RM 96 mm in 2005, contributing 38 % to the group's bottom-line.

Source / Bernama
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