| KUALA LUMPUR
KUALA LUMPUR May 8 Sapura Energy Berhad
, Malaysia's largest oil and gas service provider, said
it was beginning to see interest building in upstream projects
following sharp rollbacks in recent years from lower oil prices.
"Projects that were on hold before are starting to be looked
at again (globally)," Sapura Chief Executive Shahril Shamsuddin
told Reuters on the sidelines of the Asia Oil & Gas Conference
in Kuala Lumpur.
"It's going to take time for the decisions to come through.
It would take about 10-15 months before we could see projects
come online again," he said.
Shahril attributed the increase in interest to the recovery
in oil prices and the need to replenish a natural drop in
Brent crude prices have recovered about 80 percent
from 12-year lows hit early in 2016, although they are still at
less than half the levels of mid-2014 due to a supply glut, and
retreated back below $50 at the end of last week.
The drop-off in prices over the last three years has forced
global oil and gas majors to sharply cut costs and capital
spending, especially for upstream - or exploration and
production - projects.
In Malaysia, national oil company Petroliam Nasional Berhad
(Petronas) said last year it would slash spending by
50 billion ringgit ($11.5 billion) over the next four years,
hurting service providers such as Sapura.
Shahril said there have been few upstream projects in
Malaysia but that Sapura was bidding on some currently.
"I think towards the end of the year we will see more
activities coming online," he said.
"There are also investors coming to Malaysia that are
looking for new acreage to invest in."
Sapura will look at new markets in the Middle East, the
Mediterranean, and East and West Africa, and expand into
existing markets like Mexico, he said.
Sapura's first gas delivery from its block SK310 production
sharing contract off Sarawak will be in October, Shahril said.
($1 = 4.3350 ringgit)
(Reporting by Emily Chow and A. Ananthalakshmi; Editing by Tom