Kencana Petroleum sees earnings of over RM70 million next year

KUALA LUMPUR, Oct 22 (Bernama) -- Kencana Petroleum Bhd aims to post earnings of over RM70 million for the financial year ending July 31, 2008 on the back of existing business and increasing oil prices, executive chairman, Datuk Mokhzani Mahathir said Monday.The group also expects to post a growth of 15-20 percent yearly, with its orderbook having reached RM1.8 billion."I am very confident of our existing business, coupled with the way we see oil prices are going today and the rush to develop fields," Mokhzani told reporters after the signing of an agreement today between the group's subsidiary, Kencana Petroleum Ventures Sdn Bhd and Mermaid Drilling (Singapore) Pte Ltd to form Mermaid Kencana Rig 1 Pte Ltd (MKR1).MKR1, of which Kencana Petroluem owns 25 percent stake, will allow the group to expand its oil and gas services through the operation of offshore drilling rigs worldwide.To support the operation of MKR1 locally, Kencana Mermaid Drilling Sdn Bhd was set up to provide drilling services and act as an operator of tender rigs.The firm, in which Kencana Petroleum owns a 60 percent stake, has already applied for the necessary Petronas licences to market and operate drilling rigs in Malaysia and expects to receive it by year end.However, Mokhzani added that the new venture will only have an impact on the group's earning late 2009.Meanwhile, he said the group has the capacity to take on new projects as it has only utilised about 70 percent of its fabrication yard that spans 123 acres, as its annual fabrication capacity has increased to 40,000 tonnes after acquiring Torsco Sdn Bhd last August.Asked on mergers and acquisitions, Mokhzani said the group was currently talking to several local players who have the expertise and technologies."We don't profess to have all the technologies that we need to develop the company. So there are firms coming to talk to us to invest in them, to see if we can be a platform for them to grow," he said."These are small local companies doing very good work with experts and technologies. They just don't have solid financial foundation to go on. Hopefully between that and what we are doing in house, all the projects we are working on, we will be able to give them something to stand by," he noted.Mokhzani also explained that the group's work now was equally split between local and overseas ventures.Although Kencana Petroleum is still dedicated to Malaysian clients, he said the "Middle East is still in our plans and we are also very keen on the Gulf of Thailand.""We do get a lot of work coming from the engineering companies from India and Australia. But the amount of work in our own backyard is enough for us to chew on," he said.