Malaysian shipping group MISC Berhad has set up a five-year capital expenditure plan which is expected to see the company spend USD 4 billion for securing more floating production storage and offloading (FPSO), and shuttle tanker projects.
For this year alone a sum of USD 500 million has been earmarked for potential FPSO and shuttle tanker contracts to be concluded this year, President and Chief Executive Officer Yee Yang Chien is cited as saying by Malaysian national news agency Bernama.
As explained, the growth in demand for shuttle tankers is expected in the North Sea and North America. However, according to Chien, the driver of the company’s profit will remain the LNG and offshore businesses, adding that the company’s 27 LNG carriers have all been chartered out.
The majority of capex expenditure is expected to be funded through bank loans (70 pct), while the remaining 30 pct would be covered from available equity, Bernama reports.
World Maritime News is yet to receive a comment on the report from MISC.
The announcement comes as MISC concludes a very challenging year for both the shipping and offshore sectors.
The company’s profit for 2017 stood at RM 1.99 billion, almost halved when compared to RM 2.79 billion reported in 2016.
Chien said earlier that 2017 was a challenging year as growth opportunities were scarce while revenue was under constant pressure from weak freight rates and contract renegotiation risks.
However, he believes better days for the industry are ahead taking into account a steady rise in oil price over the past two years, and healthier level of activities for the oil and gas markets.