KUALA LUMPUR: Dialog Group Bhd is actively looking to acquire brownfield oil and gas (O&G) assets in Malaysia to grow its upstream business to account for at least one-third of the O&G support services provider’s net profit, compared with 20% at present.

Dialog executive chairman Tan Sri Dr Ngau Boon Keat told a press conference after the group’s annual general meeting here yesterday that the group will assess good opportunities as now is a good time for asset acquisitions, given lower crude oil prices.

In the crude oil markets, Brent crude futures edged down 32 US cents (RM1.33), or 0.5% to US$61.74 a barrel by 0758 GMT, while US West Texas Intermediate crude CLc1 was at US$56.54, down 26 US cents or 0.5%, Reuters reported.

Ngau went on to say that a balanced contribution from all three segments — upstream, midstream, and downstream — will allow the group to better hedge against oil price volatility. Dialog’s midstream and downstream businesses currently contribute about 40% each of the group’s bottom line.

“We continue to look for more opportunities in the upstream [segments],” he said.

“There will be quite a lot [of assets] up for sale as oil majors move back to the US. Here, [although] the old fields are not so interesting [to them], they appear very interesting to us.

“We are actively looking, but nothing is definite yet. We will announce when we are sure,” he added.

On Exxon Mobil Corp’s proposed sale of its upstream offshore O&G assets in Malaysia, Ngau said Dialog has looked into it but no decision has been made so far.

“We are just looking at it. But they are big, we are not sure whether we are qualified to buy [them] by ourselves.

“If anything, we may join (partner) with others. But at the moment, we have not decided,” he shared.

Last month, Bloomberg, quoting sources, reported that Exxon Mobil was considering a sale of its Malaysian upstream offshore assets as the US energy giant continues with its divestiture programme.

It was reported that the company was working with an adviser on the potential sale of the Malaysian assets, which could raise about US$2 billion to US$3 billion.

Meanwhile, Dialog’s deputy chairman Chan Yew Kai, who was also present at the press conference, said the 300-acre (121.41ha) land reclamation at Phase 3 of its Pengerang Deepwater Terminals remains on track for completion by this year.

Construction works for the common tankage facilities and jetty there have also started, according to Chan. The tankage facilities are expected to be ready for commissioning by the second quarter of 2021.

Chan said the land reclamation, tankage facilities and jetty at Phase 3 require a capital expenditure of RM2.5 billion.

Overall, Ngau said he is confident the performance of Dialog, which turned in a 44% net profit jump for the first quarter ended Sept 30, 2019 (1QFY20), will remain on a positive trajectory in FY20.

For 1QFY20, Dialog registered a net profit of RM164.64 million or 2.92 sen per share, up from RM114.64 million or 2.03 sen per share for the year-ago quarter. Revenue contracted 6.5% to RM645.76 million from RM690.89 million before.

Dialog’s share price settled four sen or 1.15% lower at RM3.43 yesterday, after 7.95 million shares were done, with a market capitalisation of RM19.34 billion.