Contents

Contents...............................................................................................................................1
1.0 Company Profile..........................................................................................................3
1.1 Authorised Capital......................................................................................................3
1.2 Paid-Up Capital..........................................................................................................3
1.3 Core Business.............................................................................................................3
1.3.1 Offshore Hook Up and Commissioning (HUC)..................................................3
1.3.2 Production Platform System Upgrading Services (PMUS)................................4
1.3.3 Manpower supply services..................................................................................4
1.3.4 Equipment rental service.....................................................................................4
1.3.5 Minor fabrication services...................................................................................4
1.3.6 Marine services....................................................................................................5
1.4 Corporate Structure....................................................................................................5
1.5 Organization Structure...............................................................................................6
1.6 Corporate Vision........................................................................................................6
1.7 Corporate Mission......................................................................................................6
1.8 Corporate Objective...................................................................................................6
2.0 General Environment Analysis...................................................................................7
2.1 Political Factor...........................................................................................................7
2.2 Economic Factor........................................................................................................7
2.3 Social Factor..............................................................................................................8
2.4 Technological Factor..................................................................................................8
2.5 Environment Factor....................................................................................................9
2.6 Legal Factor...............................................................................................................9
3.0 Task Environment Analysis.......................................................................................10
3.1 Threat of New Entrant Low..................................................................................10
3.2 Threat of Substitution Low...................................................................................10
3.3 Bargaining Power of Suppliers High....................................................................11
3.4 Bargaining Power of Buyers Medium...................................................................11
3.5 Competitive Rivalry High.....................................................................................11
4.0 SWOT Analysis..........................................................................................................12
5.0 SWOT Matrix............................................................................................................12
1

6.0 Ratio Analysis.............................................................................................................13

6.1 Market Value Ratio..................................................................................................13
6.2 Return on Investment...............................................................................................13
6.3 Return on Sales........................................................................................................14
6.4 Liquidity Ratio.........................................................................................................14
6.4.1 Current Ratio.....................................................................................................14
6.5 Leverage Ratio.........................................................................................................15
6.5.1 Debt ratio...........................................................................................................15
6.5.2 Debt Equity Ratio..............................................................................................15
6.6 Profitability Ratio.....................................................................................................15
6.6.1 Return on Assets................................................................................................15
6.6.2 Return on Equity...............................................................................................16
6.7 Assets Management Ratio........................................................................................16
6.7.1 Total asset turnover............................................................................................16
6.7.2 Fixed Asset Turnover.........................................................................................16
7.0 Strategic Direction.....................................................................................................17
7.1 Market Penetration...................................................................................................17
7.2 Market Development................................................................................................17
8.0 Other Relevant Information.....................................................................................18
8.1 Challenges of Oil and Gas Industry.........................................................................18
8.1.1 Government Policies.........................................................................................18
8.1.2 Falling of Crude Oil Prices................................................................................18
8.1.3 Adapting to Change...........................................................................................18
8.2 Latest News and Issues............................................................................................19
8.2.1 Carimin Clinches Mechanical Services Contract from Petronas Carigali........19
8.2.2 Two Big Shareholders Cut Stakes In Carimin...................................................19
8.2.3 Carimin Nets Two-Year Charter Deal With Petronas........................................20
Reference..........................................................................................................................21

1.0 Company Profile

1.1 Authorised Capital
Year
Units000
RM000
2014
600,000
300,000
Carimin Petroleum Berhad authorised 600 million ordinary shares in 2014 as RM0.50
each which is worth RM300 million.
1.2 Paid-Up Capital
Year
Units000
RM000
2014
116,939
233,878
Issued and paid-up share capital of RM116,939,000.00 comprising RM233,878,000
Ordinary Shares of RM0.50 each in the company.
1.3 Core Business
Carimin Petroleum Berhad is a company that providing specialized support services to
the offshore oil and gas (O&G) industry in Malaysia. Carimin Petroleum Berhad was
established in 1989 and successfully expanded from a pure manpower service supplier to
a business engaging offshore hook up and commissioning (HUC), production platform
system upgrading services (PMUS), manpower supply services, equipment rental
services, minor fabrication services and marine services. Carimin Petroleum Berhad has
completed projects valued more than RM 1 billion since its inception and among clients
include oil giants PETRONAS Carigali, Shell, Murphy Oil, Talisman, Exxon Mobil and
so on.
1.3.1 Offshore Hook Up and Commissioning (HUC)
Offshore hook up and commissioning (HUC) as the major division of business for
Carimin Petroleum Berhad. The hook up works involves the final installation of pipe
systems, decks, minor structures, caissons, conductors, instrumentation and power
cabling. Meanwhile, the commissioning works involve all testing, preservation and final
commissioning of installed facilities. These activities are to ensure the condition of HUC
meet the standard of customers.

1.3.2 Production Platform System Upgrading Services (PMUS)

Carimin Petroleum Berhad emphasize on pipeline rejuvenation in PMUS on the
production platform. The company will replace all of the corroded pipes and equipment
to prevent any accident during the working time. Other than that, installation safety and
control system enable the safety of personnel while working on the platform.
1.3.3 Manpower supply services
Carimin Petroleum Berhad also provide skills personnel to other industry players in the
O&G industry to support their business activities. The types of the personnel that
providing as following:

Project development personnel;

Responsible on designing the O&G activities included hook up and

commissioning, installation works.

Exploration and engineering personnel;
Personnel have knowledge in field development planning, risk analysis and

planning for drilling service.

Production and operational personnel;
This type of personnel is responsible on equipment repairing, maintenance
service, work over services and fabrication services.

1.3.4 Equipment rental service

In this division, Carimin Petroleum Berhad will rent the equipment such as welding
machine to the third party customers under Production Sharing Contract (PSC) to make
sure the progress is operate in smoothly. This division was started from June 2011 and
revenue that contribute from this service is around 0.01% in financial year 2013.
1.3.5 Minor fabrication services
Carimin Petroleum Berhad is currently operates a small fabrication yard located in
Kawasan Industri Telok Kalung, Keamanan, Terengganu. This division is involve in:

Procurement of raw materials and components;

Fabrication including cutting, rolling, bending and welding of metal products;
riveting for minor structures and piping; and
System installation, testing and commissioning.

1.3.6 Marine services

Carimin Petroleum Berhad initially owns an Anchor Handling Towing Supply (AHTS)
vessel and an accommodation workboat (AWB) to carry out the marine services to
customers. In June 2015, Carimin Petroleum Berhad invests RM95 million to acquire
new vessel to support ongoing and future projects.
1.4 Corporate Structure
In 2012, Carimin Petroleum Berhad was incorporated in Malaysia under the Companies
Act 1965 as a public limited company. This company is an investment holding company
while its subsidiaries, namely, CARIMIN Sdn Bhd, CARIMIN Engineering Services Sdn
Bhd, CARIMIN Equipment Management Sdn Bhd, CARIMIN Marine Services Sdn Bhd,
CARIMIN Corporate Services Sdn Bhd and CARIMIN Resources Services Sdn Bhd. The
structure of Group is as follows:

100%
100%

CARIMIN Sdn Bhd

CARIMIN Engineering

100%

Services Sdn Bhd

CARIMIN Equipment

100%

Management Sdn Bhd

CARIMIN
Marine

100%

Services Sdn Bhd

CARIMIN Corporate

100%

Services Sdn Bhd

CARIMIN
Resources
Services Sdn Bhd

100

CARIMIN Airis Offshore

Sdn Bhd

80%

Carimin

acacia

offshore

Sdn Bhd
14%

Synergy Kenyalang
Offshore Sdn Bhd

Oil and Gas Support Services

Source from http://www.carimin.com

Dormant

1.5 Organization Structure

Managing Director
Mokhtar Bin
Hashim

Executive Director
Shatar Bin Abdul
Hamid

Supply
Chain
Managemen
t Manager
Muhamad
Hatta Bin
Noah

Human
Resource
and
Administrati
on Manager
Mazhar Bin
Palil

Deputy
General
Manager of
Project
Managemen
t
Abd Hamid
Bin Husin

Maintananc
e Manager
Mad Daud
Bin
Sukarmin

Quality
Control
Manager
Roslan Bin
Mokti

Chief
Financial
Officer
Lee Heng
Aun

Source from http://www.carimin.com

1.6 Corporate Vision
To become as a leader of offshore service provider in oil and gas (O&G) industry
and choice of partnership in Malaysia while pioneering new opportunities and
bringing value to the industry.
1.7 Corporate Mission

To provide high quality of services that satisfy the need of customers.

Constantly achieve the high business performance.
To acknowledge our personnel as companys valuable assets.
Sustaining a robust management system to increase the efficiency of business.

1.8 Corporate Objective

Maintaining the highest level of integrity with all stakeholders.

 Valuing our people, partners, shareholders, customers, community and the

environment.
Conducting our offshore services according to health, safety and environment
(HSE) management system.
Expanding the networking to potential customers on oil and gas industry.
2.0 General Environment Analysis
To study the external environment of a firm by applying the PESTEL framework, it will
divide the macro-environmental forces into the following six categories: political,
economic, social, technological, environmental and legal.
2.1 Political Factor
The political environment in which a firm operates has a major impact on its operations
and profitability, and is mainly influenced by the political forces in an industry or
country. It can balance the free market and control system. Malaysias politic situation is
quite stable and the Government has assured to implement the appropriate policies and
provide its support for the creation of advantageous environment for all industry. For
example, Malaysia Government implements the Goods and Services Tax (GST) because
they are dissatisfied with their consumption tax structure. It starts in April 2014 onwards
and be one of the key highlights of the year in Malaysia There is always challenge for a
company to adopt a new policy as it has to consider the widespread effect businesses.
Carimin Petroleum Berhad invests or buys the support equipment such as new vessel.
The equipment price will increase because of GST. Carimin Petroleum Berhad need to
pay more the money includes GST. Therefore, the revenue of Carimin Petroleum Berhad
will decrease.
2.2 Economic Factor
This factor is determinant of a Malaysia economys performance that directly impacts a
company and has generates long term effects. The overall outlook of the Malaysia
economy is still uncertain such as the price of oil stays low and the currency Ringgit is
volatile. The Malaysian Ringgit has been under pressure in recent months. It hurts by
weak commodity prices and a strengthening US dollar. Analysts said the trend may
continue, with additional factors such as movements in bond markets and uncertainty
7

about the country's fiscal budget weighing on sentiment. They have faced a downtrend in
the Oil & Gas sector. Due to the weakening in the oil & gas sector, Carimin Petroleum
Berhad in the upstream segment, faced an uphill challenge with reduced rates and slow
down of both onshore and offshore activities. Therefore, the lower volume of work orders
across Carimin Petroleum Berhad business segments also contributed to the lower than
expected revenue and losses in 2015.
2.3 Social Factor
Social forces are the ways in which businesses are influenced by changes in society. This
challenge includes relations with various stakeholder groups, health and safety concerns
such as human rights, employee rights, stakeholder rights, environmental protection and
so on. Carimin Petroleum Berhads employees believe that Corporate Social
Responsibility (CSR) is a way by which they play their role and responsibilities within
society. They contribute positively to the society and environment and build sustainable
communities over time. It can help to build a reputation as a reliable potential partner for
public-private strategic partnerships: cross-sector and government. For example, they
organized and participated in various CSR activities such as bringing Ramadan Cheer to
Malacca, flood relief mission to the east coast and so on. Furthermore, Carimin
Petroleum Berhad its employees to be their most important and valuable assets. They
want to ensure that employees are always treated with the utmost respect, dignity and
fairness. They believe that a conducive working environment to encourage continuous
growth of all their employees.

2.4 Technological Factor

This factor is about the innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably. This refers to automation, research and
development and the amount of technological awareness that a market possesses. In order
to gain the competitive advantage, Carimin Petroleum Berhads expansion plans in the
pipeline include upgrade of minor fabrication yard, acquisition of a new AWB,
8

diversification into marine services, and expansion of equipment rental services. These
plans will provide Carimin to maximize the profit in unstable economic condition.
Furthermore, Carimin Petroleum Berhads subsidiary, Carimin Engineering, collaborate
with Makamin Offshore Saudi Ltd. Company (MOS) and Petro Allied International (PAI)
on April 24, 2015. The companies will focus their collaboration activities on: Offshore
Pipeline Installation and Replacement; Engineering, Procurement, and Construction
projects; and Construction of Marine and Port Projects. They combined their resources
and expertise to pursue the opportunities in providing technical services.
2.5 Environment Factor
There is a concern over the side effect of oil and gas activities on the marine environment
that can occur at the various phases of their production projects. For the upstream
activities, referring to activities in the oil and gas industries from continental shelf and
deep waters, their environmental concerns are varied. They include sea pollution, habitat
protection and biodiversity, incidents of oil spills, and water contamination. Carimin
Petroleum Berhad provides the support services have caused local detrimental impacts to
soils, surface and ground waters, and ecosystems because of facilities installation with
hook up and commissioning. Besides that, some of the other environmental factors
Carimin Petroleum Berhad should worry about are environmental rules and regulations,
environmental disasters in countries which giving technical support services and global
warming and other environmental issues in a global level.
2.6 Legal Factor
Environmental issues are becoming one of concern in oil and gas industry. Oil and gas
activities are required to obey with all the Acts, Laws, as well as related to the
Environment. Carimin Petroleum Berhad should also stay alert about introduction related
environment policies and regulations by authorities. Carimin Petroleum Berhad ensure
that it does not violate any laws and regulations in the home market and countries from
where they provide technical services. For example, Carimin Petroleum Berhad follow
the Environment Quality Act 1974. The act is about cannot throw the waste such as
discarded offshore installations on the sea and the construction of off-shore and on-shore
9

pipelines in excess of 50 km in length. It can ensure that not much of effect to the
biodiversity and maintain the natural ecosystem.
3.0 Task Environment Analysis
3.1 Threat of New Entrant Low
In oil and gas industry, threat of new entrant is insignificant and the barrier of entry for
new entrants to this industry is absolute high. There have a few of reasons that enough to
scare away the serious entrepreneurs or companies. In Malaysia, there are many existing
market players in the industry such as Carimin Petroleum Bhd, Deleum Bhd, Uzma Bhd
and SapuraKencana Petroleum Bhd. These companies are benefits from the economies of
scale in order to minimize the switching cost of customers. Also, high reputation for the
existing companies enable to build up mutual trust with the customers. For example, one
of the biggest oil and gas company which is PETRONAS awarded major offshore hookup, commissioning and maintenance contract to six contractors included Bhd for a period
of five years until 2018. Thus, a strong reputation of competitor in industry will force the
new entrants to improve their brand value before compete with them. This will spend a
lot of time to catch up the competitors. Moreover, the main barrier of new entrants is the
start-up capital and operation cost are highly. Cost for purchase equipment such as vessel
and workboat are very expensive and require skilled workers to run and maintain the
operation. Besides that, as a services provider in oil and gas industry, high skills and
technology advancement are very important. So, the new entrant must requires high
knowledge and technology before involve in this industry.
3.2 Threat of Substitution Low
Threat of substitution is the key element to affect the level of profit of a company. The
availability of substitute in the industry will increase the competitive for the company. As
a service provider in the oil and gas industry, threat of substitute can be consider as low.
This is because high switching cost will be occur to the consumers when they are
choosing other substitutes. All the business activities in hook-up and commissioning
(HUC) service are involve a huge amount and bond with an agreement for a period time.
It is very risky for the consumer seeking a new substitution that never been collaborated
with them. In additional, the numbers of substitution are limited in Malaysia.
10

Government is responsible to licensing the service support contractors in oil and gas
industry to safeguard the countrys oil and gas resources.
3.3 Bargaining Power of Suppliers High
The bargaining power of supplier in oil and gas industry will influence by the availability
of substitutes and the switching cost. In this industry, the bargaining power of suppliers is
directly depends on the demand of the market and the price of crude petroleum in the
world. When the demand and price of world market is high, the bargaining power of
suppliers will relative high. Besides that, the suppliers are limited in local market due to
require a high level of technical knowledge in this industry. For example, Nam Cheong
Limited as shipbuilder company that supply Anchor Handling Tug Supply (AHTS) vessel
and a workboat to Carimin Petroleum Berhad. Thus, the knowledge and technology
requirement of suppliers will directly increase the power of bargaining to their
consumers.
3.4 Bargaining Power of Buyers Medium
The service that provided by Carimin Petroleum Berhad is focus on the major customers
which is oil giant PETRONAS Carigali. Under the Petroleum Development Act 1974
(PDA) that enacted by government, PETRONAS was given the authority for licensing
any third party contractors that wish to enter into this industry. In additional, Carimin
Petroleum Berhad secures early activation of Topside Major Maintenance (TMM)
services that valued RM900.8 million from PETRONAS Carigali. Therefore, the
bargaining power of buyers is very high for oil and gas industry in Malaysia. If the
company raise the price of their services, they will face big losses for losing their main
customers.
3.5 Competitive Rivalry High
The competitive of the service providers in oil and gas industry is high. All of the
companies who at the upstream sector are wishing to corporate with the oil giant,
PETRONAS Carigali. PETRONAS will always awards some umbrella contracts to the
local service companies through bidding and then PETRONAS will choose the service
contractor who offered the lowest price. On the other hand, the competitors always try to
grab more market share in the industry in order to increase their competitive advantages.
11

Strengths
1 Strong financial position
2 Technology of advancement
3 Skilled workers
4 Diversification
5 Reputation

Weaknesses
1 Dependency on major
customer
2 High operation cost

Opportunities
1 Globalization
2 Population growth
3 ASEAN
4 WTA
5 Technological advancement

Threats
1 Fluctuation of currency
2 World economic recession
3 Change in policies
4 Competition
5 Natural disaster

The company who holing less market share will affect their business operation and
obstruct to develop the technology of advancement.

4.0 SWOT Analysis

5.0 SWOT Matrix

Strength

Weakness

S1 Strong financial
position
S2 Technology of
advancement
S3 Skilled workers
S4 Diversification
S5 Reputation

W1 Dependency on major
customer
W2 High operation cost

Opportunity

SO

WO

O1 Globalization
O2 Population growth
O3 ASEAN
O4 WTA
O5 Technological
advancement

S1 S3 S5
O1 O3 O4 O5

W1 W2
O1 O3 O4 O5

IFAS

EFAS

12

Threat

ST

WT

T1 Fluctuation of currency
T2 World economic
recession
T3 Change in policies
T4 Competition

S1 S2 S3
T1 T4

W1
T2 T4

From the SWOT matrix in above, the S-O strategy is most suitable for Carimin
Petroleum Berhad. The first strength of Carimin Petroleum Berhad is strong financial
position. This can be proven by the annual report of the company, there was making
profit constantly until 2014. While the company get losses in 2015 due to the depreciation
of RM and decline in crude oil prices, the balance sheet of company still remains healthy
with net cash position of RM52.9 million. Carimin Petroleum Berhad can using this
strength to take advantages in opportunity which is globalization. This is because when a
company decided enter into global market, it needs money to make a new investment in
foreign market.
Besides that, Carimin Petroleum Berhad will collaborates with the companies who under
ASEAN and WTA. Skills workers of Carimin Petroleum Berhad will be an advantage
because O&G industry require high knowledge to manage the offshore activities.
Meanwhile, high reputation will get more benefits from the ASEAN and WTA because
high reputed company will gain trusts from others. Therefore, the foreign companies will
choose Carimin Petroleum Berhad as their collaborate partner.
6.0 Ratio Analysis
6.1 Market Value Ratio
Earnings per Share

2014
12.64 sen

2015
(3.89) sen

Earnings per share means the portion of a company's profit allocated to each of common
stock. Earnings per share can indicate the company's profitability. Based on calculation,
earnings per share (EPS) of Carimin Petroleum Berhad declined 69.22% from 12.64sen
in 2014 to -3.89sen in 2015. This market value ratio showed that company havent to take

13

the action timely in confront with an unstable economic situation which are the falling of
Malaysia Ringgit and the volatile of crude oil price.

6.2 Return on Investment

2014
2015
Return on Investment
14.67%
(4.67%)
Return on Investment (ROI) is used to measure profitability for a given amount of time.
Based on calculation, Carimin Petroleum Berhad return on investments drop 68.17%
from 14.67% in 2014 to 4.67% in 2015. This indicate the revenues of Carimin Petroleum
Berhad not enough to cover the total costs due to the price of oil.

6.3 Return on Sales

Operating profit
x 100
net sales

2014

2015

44,108
x 100
245,575

4,616
x 100
163,439

17.96

2.82

Return on Sales (ROS) is measurement of a companys performance. ROS is also known

as a company's "operating profit margin". Based on calculation, return on sales of is
decrease 85.3% from 17.96% in 2014 to 2.82% in 2015. An decreasing ROS indicate
Carimin Petroleum Berhad is less efficient in generating profit and face with financial
troubles.
6.4 Liquidity Ratio
6.4.1 Current Ratio
2014
current asset
current liabilities

2015

147,727
63,850

178,648
124,587

2.314

1.434

The current ratio the proportion of current assets to current liabilities. The current ratio is
used as an indicator of a company's liquidity. This ratio expresses a firm's current debt in
14

terms of current assets. Based on calculation, current ratio of Carimin Petroleum Berhad
is declined 38.03% from 2.314 in 2014 times to 1.434 times in 2015. A current ratio can
indicate a liquidity issue which is liabilities was increasing from 2014 to 2015.

6.5 Leverage Ratio

6.5.1 Debt ratio
2014
liabilities
assets

2015

97,060
204,482

155,661
315,275

0.47 :1

0.49 :1

The debt ratio is a measure of the amount of debt that the company has on its balance
sheets compared to its assets and how much a company relies on debt to finance assets.
Based on calculation, debt ratio of Carimin Petroleum Berhad rise 4.26% from 0.47 in
2014 to 0.49 in 2015. A debt ratio of 0.5 is often considered to be less risky. This means
that the company has twice as many assets as liabilities.

6.5.2 Debt Equity Ratio

2014
liabilities
equity

2015

97,060
107.422

155,661
159,614

0.9 : 1

0.98 :1

The debt equity ratio is a measure of a company's ability to repay its obligation and a
standard for judging its financial standing. Based on calculation, debt equity ratio of
Carimin Petroleum Berhad increases 8.88% from 0.9 in 2014 to 0.98 in 2015. A high
result indicates that Carmin Petroleum Berhad was financing a large percentage of its
assets with debt, not a good thing.

15

6.6 Profitability Ratio

6.6.1 Return on Assets
2014
Return on Assets

10.71

2015
(3.71 )

The return on asset (ROA) is a measure the amount of profit made by a company per
ringgit of its assets. Based on calculation, return on assets of Carimin Petroleum Berhad
drops 65.35% from 10.71% in 2014 to 3.71% in 2015. A decreasing ROA indicates less
profitability. It is because Carimin Petroleum Berhad has weak profit margins due to
economic condition.

6.6.2 Return on Equity

2014
Return on Equity

20.39

2015
(6.18 )

The return on equity measures how much profit each dollar of common stockholders'
equity generates. Based on calculation, return on equity of Carimin Petroleum Berhad
declined 69.7% from 20.39% in 2014 to 6.18% in 2015. This indicates Carimin
Petroleum Berhad facing unstable economic which is affected by the falling of Malaysia
Ringgit and the price of crude oil.

6.7 Assets Management Ratio

6.7.1 Total asset turnover
sales
averagetotal assets

2014
245,575
151,482+204,482
(
)
2

2015
163,439
204,482+315,275
(
)
2

1.38

0.629

The total asset turnover is a measure of how efficiently a company's assets

generate revenue. Based on calculation, total asset turnover of Carimin Petroleum Berhad
declined 54.42% from 1.38 times in 2014 to 0.629 times in 2015. This indicates Carimin
Petroleum Berhad is not using its assets efficiently and most likely have management or
production problems.

16

6.7.2 Fixed Asset Turnover

average
sales
assets

2014
245,575
56,755+ 17181
(
)
2

2015
163,439
136,627+ 56,755
(
)
2

= 6.64 times
= 1.69 times
The fixed asset turnover measures a company's ability to generate sales from fixed-asset
investments. Based on calculation, Carimin Petroleum Berhad fixed asset turnover
decreases 74.55% from 6.64 times in 2014 to 1.69 times in 2015. The ratio shows that
Carimin Petroleum Berhad is managing its assets less effectively because of booming of
sales.
6.8 Net Tangible Assets
Tangible assets-

2014(RM000)
131,704-97,060

2015(RM000)
199,066-24,173

Total liabilities

=34,644

=174,893

Net Tangible Assets are calculated as the tangible assets such as equipment less all liabilities. Net
tangible assets (NTA) will determine the maximum revenue (MR) for the forthcoming year.

Based on calculation, net tangible assets of Carimin Petroleum Berhad increases 4.05%
from RM34,644,000 in 2014 to RM174,893,000 in 2015. High net tangible assets in two
years have more available security to finance the acquisition. Carimin Petroleum Berhad

increases the number of equipment such as motor vehicles in 2015.

7.0 Strategic Direction
7.1 Market Penetration
According to the annual report 2015 of Carimin Petroleum Berhad, the hook up and
commissioning (HUC) division was contributed the highest revenue for company which
achieved 67% on group revenue. Therefore, the market penetration strategic that
implement by the company aims to enhance their HUC division in order to increase their
market share in O&G industry. Besides that, the company had been invested RM 95
million to acquire new vessel to increase the efficiency of hook up and commissioning
(HUC) division. In additional, the company has sufficient capital to seeking a new
technology by carry out research and development (R&D). This will gain competitive
17

advantages that attracting more customers to purchase companys services and the
company can keep the pace of changing in environment by obtain the new technology.
7.2 Market Development
The market development strategy of Carimin Petroleum Berhad focus on new market that
creates a strategic alliance in oversea. One of the weakness of Carimin Petroleum Berhad
is dependency on major customer which is PERTRONAS. Through the SWOT analysis,
globalization as the opportunity for Carimin Petroleum Berhad to overcome this problem
by teamed up with Makamin Offshore Saudi Ltd (MOS) and Petro Allied International
DMCEST to explore a new opportunities in Saudi Arabia, the Middle East, Southeast
Asia and Australia. The Carimin Petroleum Berhad and new partners will collaborate to
jointly bid for O&G activities in new market. Thus, the market share of Carimin
Petroleum Berhad will be increase and the profitability of company will relative high by
exploring to a new geographical market.
8.0 Other Relevant Information
8.1 Challenges of Oil and Gas Industry
8.1.1 Government Policies
In United Nations Framework Convention on Climate Change before the Paris
conference 2015, Malaysia was pledged to cut down 45% of the intensity of CO2
emissions intensity by 2030. Therefore, government will inspects closely and companies
in O&G industry are encourage to invent a new natural resources. Besides that,
government also intends to reduce the car ownership of households which placing third in
the world. Recently, government encourages people to use public transport instead of
private car. These will directly affect the demand of crude oil and sales of Carimin
Petroleum Berhad will be drop.
8.1.2 Falling of Crude Oil Prices
The plunging price of a barrel of oil emerges huge effects to the oil and gas industry,
Carimin Petroleum Berhad as a service provider in this industry will continue to face
uncertainty ahead. Since 2014, price of crude oil had fallen more than 70 percent from
$100 per barrel. This will reduce the demand of services from Carimin Petroleum Berhad
to their customers. For example, the major customer of Carimin Petroleum Berhad,
18

PETRONAS decided to reduce their productivity because of the falling oil price and its
weaker earning.
8.1.3 Adapting to Change
Increasing global energy demand, at a time when more assets are maturing and declining,
is challenging the industry as never before. Carimin Petroleum Berhad faced an unstable
condition with global change. There will become more challenging to Carimin Petroleum
Berhad. They need to respond the challenges by taking a long term view, innovating,
adapting and appraise major trends as they define medium-long term investment plans.
Because of depressing of oil price, Carimin Petroleum Berhad need to seek a way to
reduce the unnecessary cost by using advanced technology. They tried to find
opportunities such as link multiple platforms operated remotely from a single onshore
center or to deploy remote monitoring for onshore and offshore operations can obviate
the need for physical on-site inspections. One of the oil and gas company, BP, is already
adopting drone technology to inspect pipelines at its remote Prudhoe Bay field in Alaska.
Furthermore, the climate change also is a board challenge to Carimin Petroleum Berhad.
Installation of offshore instrumentation is not an easier project. They need to spend the
time to install with the climate change and make sure that the quality standard is
achieved. Therefore, they need to adapt their strategies to change when meet some
challenges.
8.2 Latest News and Issues
8.2.1 Carimin Clinches Mechanical Services Contract from Petronas Carigali
Wholly-owned subsidiary of Carimin Petroleum Berhad, Carimin Engineering Services
Sdn Bhd has clinched a contract to provide technical services for PETRONAS Carigali
Sdn Bhd on Feb. 24 2016, The two years contract is effective from March 2, 2016 to
March 1, 2018 with an option to extend for another year to March 1, 2019. It is on a call
out basis with PETRONAS Carigali issuing the Release Order as and when there are
requirements to perform the service. The total value of the workscope will depend on the
duration of the services and cost related to the Project Management, mechanical services,
materials and other related services.

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8.2.2 Two Big Shareholders Cut Stakes In Carimin

Carimin Petroleum Bhds two major shareholders have cut their stakes in the company.
The group revealed that managing director Mokhtar Hashim reduce his direct interest in
the company after selling 15,555,400 shares at 45 sen via an off market transaction. He
now has 58,873,234 shares or 25.17% interest in the company. The other major
shareholder is executive director Shatar Abdul Hamid who disposed of 6,666,600 shares
at 45 sen also via an off market deal. Shatar now has 3.79% direct interest in Carimin
from the previously 6.64% interest held. Carimin Petroleum Berhad was hurt by the
slump in oil prices since 2014, had in the second quarter ended Dec 31, 2015, posted a
net loss of RM1.18mil from net profit of RM4.63mil in the corresponding period, a year
ago. This was against a lower revenue of RM41.24mil from RM52.98mil, previously. It
was reported in November that the group had plans to take advantage of the uncertain
economic climate. This was to increase the companys efficiency and prepare for the next
uptrend in the sector.
8.2.3 Carimin Nets Two-Year Charter Deal With Petronas
Carimin is required to provide two types of vessels, namely the Anchor Handling
Tug/Supply (AHTS) vessel and the workboat. The contact is effective for two years until
2017 and has an option for a further one-year extension. The spot charter contract
stipulates usage of the vessels by the client on demand within the contract period. This
contract is significant for Carimin Petroleum Berhad because it is the groups first
contract to provide pure marine services, which is a positive step towards establishing
this new earnings stream. This award also deepens their working relationship with PCSB,
where they have existing contracts to provide hook-up and commissioning (HUC),
maintenance, manpower, and now marine vessel services. They believe that winning this
contract amidst the dampened sentiment in the oil and gas sector demonstrates the
groups competitiveness within the industry. Currently, the Group owns Carimin Airis, an
AHTS, and co-owns SK Deep Sea, a workboat, that are supporting the groups ongoing
projects in HUC and maintenance works.

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Reference

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Retrieved 27 March 2016, from
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Carimin Petroleum Berhad. (2015). 2014-2015 Annual Report. Retrieved from
http://www.financialreport.biz/File/AR/2015/11/4/5257%20-%201400349548
538.pdf
Carimin Petroleum Offers IPO at RM1.10 per share. (2014, October 24). Borneo Post
Online. Retrieved from http://www.theborneopost.com/2014/10/24/cariminpetroleum-offers-ipo-at-rm1-10-per-share/
Doshi.V., Clark.A., Maestro.A.D. (2016). 2016 Oil and Gas Trends.
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Retrieved 27 March 2016, from http://emag.oilandgastechnology.net/upstreamnews/carimin-nets-two-year-charter-deal-petronas

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Media Relations Department. (2013, November 15). Petronas Awards Major Offshore
Hook-Up, Commissioning and Maintenance Contract. Retrieved from
http://www.petronas.com.my/media-relations/mediareleases/Pages/article/PETRONAS-AWARDS-MAJOR-OFFSHORE-HOOK-UP,COMMISSIONING-.aspx
Melissa. G. (2015, November 28). Malaysia Has Pledged to Cut Carbon Emissions
Intensity by 45 per cent by 2030. Channel NewAsia. Retrieved from
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Ng, P.S. (2014, October 18). Carimin Petroleum IPO on Track. The Star Online.
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Puspadevi. S. (2016). Two Big Shareholders Cut Stakes in Carimin.
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