Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Friday, January 22, 2010

SapuraCrest expands investment in India

SapuraCrest Petroleum Bhd (8575) is poised to seal a multi-million dollar contract in Chennai with an Indian partner today.

It is learnt that the deal is related to the use of SapuraCrest's new derrick lay vessel for an oil and gas major.

The latest job will swell SapuraCrest's orders in India, which amount to US$200 million (RM674 million) over the past few years.

The signing ceremony of the contract is due to be witnessed by Prime Minister Datuk Seri Najib Tun Razak, who is on his final leg of a five-day working visit to India.

Meanwhile, SapuraCrest said in a statement that it had for the past 10 years invested US$110 million (RM370 million) in the Indian oil and gas sector.
The investment comes in the form of building two derrick lay barges, the LTS3000 and QP2000. The vessels are expected to start operating in the first quarter of 2010.

SapuraCrest now has joint ventures with two local firms there, Larsen & Toubro Ltd (L&T) and Quippo Prakash Pte Ltd.

"Our venture in India is important to us because we consider India as a major international market for our future," SapuraCrest executive vice chairman Datuk Shahril Shamsuddin said in the statement released in Kuala Lumpur yesterday.

He said India has recently embarked on major oil and gas exploration and development projects to reduce dependence on foreign oil. This creates a major opportunity for companies in the oil and gas services sector.

"Tapping onto this opportunity is in line with SapuraCrest's main objective of expanding its operations beyond Malaysian shores and becoming a global oil and gas services provider," he added.

To date, SapuraCrest provides services such as offshore facilities maintenance and upgrading, and soil investigation and survey works in India.

Its major clients there include Oil and Natural Gas Corp, Reliance, Shipping Corp of India and Cairns Energy.

Shahril said the Indian operation will ensure higher utilisation of SapuraCrest's marine assets, which otherwise would be idle during the monsoon season in Southeast Asia.

The monsoon season in India is opposite to that of Southeast Asia.

He also said India will lead SapuraCrest to more lucrative markets, especially the Middle East.

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