MIDF Research maintained its positive stance on the oil and gas sector following encouraging signs for the sector.
In its wildcard report on monthly review and outlook of the oil and gas industry, MIDF Research said 2013 had been a year packed with awards of contracts, new oil and gas discoveries and possibly more mergers and acquisitions to expand and strengthen income streams.
"We can expect a good mix of local, regional and international jobs to be awarded to Malaysian oil and gas players.
"And, we can expect Petronas to keep the momentum going as it pushes for more deepwater, high pressure, high temperature and high carbon dioxide oil fields," it said.
Some RM3.5 billion worth of contracts were awarded to locally-listed oil and gas companies in September 2013, which represents one of the highest monthly contract awards in terms of value for the year.
Total contracts awarded stood at more than RM33 billion with main
beneficiaries in September being the Malaysia Marine and Heavy Engineering Holdings Bhd and Wah Seong Corp.
MIDF Research said the sustained momentum in oil prices was testament of sustained global demand and cleverly orchestrated production output which would continue to spur exploration and production activities.
Year-to-date, the price of West Texas Intermediate (WTI) crude oil climbed 13.1 per cent to US$103.9 per barrel, after it retreated from a two-year high of US$110.3 per barrel reached in August 2013.
"Petronas, along with its foreign partners are successfully hitting new oil pays locally which will trickle an abundance of services opportunity down the value chain," it said.
International oil companies, including 'supermajors' BP Plc,
ExxonMobil, Chevron Corp, Royal Dutch Shell and Total SA are expected to increase 2013’s capital expenditure to US$421.2 billion from US$379.9 billion a year earlier.
For 2014, capital expenditure by international oil companies are also expected to sustain at US$425.1 billion.
MIDF Research maintained 2013 average price at US$96.50 per barrel as further tapering in prices was expected due to increased supply.
"For the rest of 2013, oil prices are expected to be supported above US$95 per barrel by a few key factors, with an upside bias.
"Asia is expected to lead oil consumption growth at 21.7 million barrels per day (mbpd) in 2013 compared with 21.1 million mbpd the year before. Consumption in Europe is expected to decline while that in the Americas may remain flat," it added.-- Bernama