UMW looks to build up oil and gas unit

Nov 01, 2002 01:00 AM

by Mokhtar Hanafiah

UMW Holdings, which is looking at acquiring three to four companies to strengthen its oil and gas division, expects to make the first such acquisition within the next 12 months, said managing director Dr Abdul Halim Harun.
“We are seriously evaluating three to four unlisted companies involved in oil and gas activities. The negotiations are half way through. We are interested in acquiring majority stakes in these companies,” he told after the opening of UMW’s oil and gas division office in Kuala Lumpur.
Halim said UMW was keen to acquire companies that were involved in the operation and maintenance of both offshore and onshore facilities for the oil and gas industry. “Should we acquire these three to four companies, we will use internally generated funds to finance the acquisitions,” he added.

Halim said the oil and gas division now contributed “less than 10 %” to UMW’s bottom line. “But within the next four to five years, we expect the contribution to grow to 10 %–15 %,” he said.
He said the RM3.4 mm investment made by UMW in its new office in Plaza Sentral reflected a commitment to further grow its oil and gas division, which is the fourth largest contributor to the group’s business. On the establishment by UMW of a wholly-owned subsidiary, UMW Oil Field Services (Tianjin) in China which involved an investment of RM 2 mm, Halim said: “We may invite foreign partners to take a minority stake in the subsidiary. We are now talking to some parties from China and Japan.”

He said the China operation would begin its activities in the repair and maintenance of pipes for international clients in China’s oil and gas industry by the first quarter of next year. “We expect the China operation to generate business of between $ 1.5 mm and $ 2 mm in its first year of operations,” he added.
UMW’s oil and gas division head Zulkifly Zakaria said the division’s other business unit was involved in offshore support services, spearheaded by UMW Petrodril (M), which was acquired by the group in March. “The division is now evaluating involvement in jack-up rig operations and ownership,” he said.

Source: The Star Online
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