Page 8 - AsianOil Week 31

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Barakah sues Petronas over suspended licence
PROJECTS & COMPANIES
MALAYSIAN service provider Barakah Off- shore Petroleum is suing state-owned Petronas over what it claims to be an unwarranted suspen- sion of wholly owned PBJV’s operating licence.
Petronas suspended the equipment and ser- vice provider’s licence for three years on July 8 after upstream unit Petronas Carigali filed a report of non-performance in relation to PBJV’s execution of an underwater services contract.
Barakah said in a stock exchange ling on August 6, however, that the suspension notice was issued a er Petronas Carigali had positively appraisal PBJV’s completed work. As such, the company is seeking MYR1.02bn ($243.5mn) in compensation, which it claims is based on the loss of future pro ts, reputation and share price.
Barakah said Petronas had 14 days to comply with its demand.
Barakah said on July 9 that the suspension meant “Petronas, including its subsidiaries and any petroleum arrangement contractors (PACs), will not award any new contracts to PBJV during the suspension period. PBJV will not be allowed to bid for new projects ... during the suspension period.”
e Edge reported in March that Petronas had originally suspended PBJV’s licence in
June 2018 over similar reports of non-perfor- mance from several other unnamed oil and gas developers.
Barakah is under increasing pressure as it seeks to repair its tattered nances and escape from its Practice Note 17 (PN17) status. It became a PN17 company in May a er it defaulted on an Export-Import Bank of Malaysia (Exim Bank) loan taken out to nance a pipe-laying barge. Barakah’s wholly owned Kota Laksamana 101 received a notice of demand on May 17 for the outstanding pay- ment of $2.65mn.
Since the suspension of PBJV’s licence, Bar- akah has lost two of its leadership team. Com- pany president Abdul Rahim Awang resigned on July 19, while CFO Firdauz Edmin quit on July 23.
Barakah has proposed re-organising its nances via a deal with Singapore’s Lecca Group that will see the latter become Barakah’s single largest shareholder with a 44.87% equity interest. Barakah has also said it will use the MYR88mn ($21.4mn) raised from the proposed disposal of a pipe-laying barge to Lecca to partially repay the Exim Bank loan.™
China could tap Iranian oil in retaliation for US tariffs
EAST ASIA
POLICY
AS trade tensions between China and the US intensify, fears are mounting that Beijing may ramp up its purchases of Iranian oil as a means of retaliating against Washington.
e US threatened on August 1 to impose a 10% tari on $300bn worth of Chinese goods from September 1. is then led Chinese For- eign Ministry spokeswoman Hua Chunying to warn on August 2 that Beijing was ready “to take the necessary countermeasures to protect the country’s core and fundamental interests”.
Bank of America (BofA) Merrill Lynch has cau- tioned that if these countermeasures were to include increasedpurchasesofIranianoilthenitcoulddepress international oil prices by $20-30 per barrel.
“While we retain our $60 a barrel Brent forecast for next year, we admit that a Chinese decision to reinitiate Iran crude purchases could send oil prices into a tailspin,” the bank said in report published on August 2. “ is decision would both undermine US foreign policy and cushion the negative terms-of-trade e ects on the Chinese economy of rising US tari s.”
The warning came as an investigation by e New York Times claimed that Chinese oil imports from the Middle Eastern state in de - ance of US sanctions were already larger than previously estimated. The US daily said that of the more than 70 Iranian oil tankers it had tracked since May 2, when the US’ six-month waiver to eight countries on sanctions against Iran’s oil exports expired, 12 had delivered oil to China or the Eastern Mediterranean. e New York Times used data from MarineTra c, Ref- initiv and Planet Labs in its research.
S&P Global Platts, meanwhile, claims that while Iran’s oil exports fell below 550,000 barrels per day in June from about 875,000 bpd in May, roughly half was shipped to China.
In addition to the revival of Iranian crude exports depressing international oil prices, an esca- lation of the US-China trade war could also squeeze prices by reducing global oil demand, the BofA Merrill Lynch report warned. e bank’s analysis suggests that the new US tari s could reduce global demand by 250,000-500,000 bpd.™
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w w w . N E W S B A S E . c o m Week 31 07•August•2019