Cheap entry but risk abundance
FIVE years ago, liftboats were an expensive asset in the oil and gas industry. It cost in excess of RM150mil to build each liftboat and if there is a contract, the amount would be higher.
Some companies paid well above RM250mil to build liftboats and that too without charter. But prices of oil and gas assets have come down significantly since the downturn in the sector in 2014. The extent of its drop in value of liftboats is evident from Coastal Contract Bhd’s recent acquisition of a 80% stake in a company operating off Singapore.
In the deal, Coastal Contract has forged a joint venture with Jub Pacific Pte Ltd to take over a private company, Elite Point Pte Ltd, which owns a liftboat that comes with a charter of up to 20 months.
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