KUALA LUMPUR: Offshore oil and gas (O&G) exploration activities are expected to remain muted in 2020, given the current lower oil price and demand environment amidst the Covid-19 pandemic, says Bumi Armada Bhd.
Its chairman, Tunku Ali Redhauddin Ibni Tuanku Muhriz, felt that even after a vaccine or cure is available, it will take some time for the global economy and oil demand to recover.
“We therefore expect growth opportunities in 2020 to be limited,” he said in the Bumi Armada Annual Report 2019.
Last year, oil prices ranged between US$60 and US$70 per barrel but has since plummeted to hover slightly above US$30 per barrel currently, with the US crude at US$30.64 and Brent Crude at US$33.51.
On April 20, crude oil markets were in chaos when the United States’ crude oil futures contract for May plunged to below US$0, while the Brent slumped to near US$20.
Bumi Armada CEO Gary Neal Christenson said low oil prices will result in cuts or delays in investment in the O&G sector, especially for new projects, which would reduce potential growth opportunities.
As an offshore energy facilities and services provider, he said, the company would need to operate its assets at optimum levels, secure new charters for available assets and dispose of surplus vessels in 2020.
“We need to remain vigilant on costs and ensure that we are reducing our debt while managing our overall balance sheet,” he added.
At the noon break, its shares were among the most active counters, rising by 6.5 sen to 26 sen, with 449.2 million shares traded. – May 18, 2020, Bernama
