Brazil may return as a potential bid market for Malaysian FPSO players, says AmInvestment

TheEdge Tue, Feb 20, 2024 12:28pm - 1 month View Original


KUALA LUMPUR (Feb 20): AmInvestment Research has maintained its “overweight” rating on the oil and gas sector and said that Brazil may come back as a potential bid market for Malaysian floating production storage and offloading (FPSO) players.

In a sector update on Tuesday, the research house said it sees Yinson Holdings Bhd (“buy”; fair value (FV): RM4.00) as the prime beneficiary, given its strong track record with Petrobras, with two FPSOs due to be delivered by 2025.

“We also expect Malaysian Marine and Heavy Engineering Corp Bhd (“non-rated”) to be an indirect beneficiary from stronger external jobs flow, which will help in its recovery and provide improved earnings to its parent company, MISC Bhd (“hold”; FV: RM7.81).

AmInvestment said Brazil’s national oil and gas company had announced that it had pushed back the submission date by as much as four months for proposals of three key FPSO tenders: SEAP-1 and SEAP-2 for the Sergipe-Alagoas tender, as well as the Barracuda-Catinga field.

It said that this was the third delay back in October 2023.

The rationale for the delay was to improve bidding rules to enhance the commercial viability of the projects, it said.

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