Hibiscus To Continue Exploration Activities Overseas

By Harizah Hanim Mohamed KUALA LUMPUR, Feb 4 (Bernama)-- Hibiscus Petroleum Bhd will continue with its exploration activities overseas despite the collapse in the benchmark Brent crude oil price, along with brewing tensions between the major oil producers. At present, Hibiscus is involved in the Anasuria cluster of the North Sea (United Kingdom), the West SeaHorse field (Australia) as well as participating in the South East Ras El Ush concession via its wholly-owned subsidiary, Gulf Hibiscus Ltd. Managing director Kenneth Pereira said the oil price movement had a direct impact on the company, but its decisions were based on long-term plans, besides keeping a watchful eye on the situation and trends. "The sub-US$30 per barrel was only seen for a couple of days. We will monitor the trend and if oil trades in this range for a certain period, then we may change some of our deal parameters," he said in an email to Bernama. Brent Crude Thursday lingered at US$35 per barrel, an improvement from its 12-year low of US$27.67 recorded on Jan 18, 2016. Crude oil traded at its highest at US$145.61 per barrel on July 2008. In a latest update, Russia is pushing for a deal with the Organisation of the Petroleum Exporting Countries (OPEC) to curb booming global production. Another report quoted Russian Foreign Minister Sergei Lavrov as saying that the country was open to coordinating with the oil cartel and countries outside it, on curbing production and boosting prices. The oversupply situation happening now is partly due to the lifting of economic sanctions against Iran recently. It allowed the republic to freely export its oil and added to the current glut. Commenting on the gloomy global economy, Pereira said that low oil prices would normally be a catalyst for economic growth, but in the present scenario, there was the case of weak demand from China and an oversupply situation. "I disagree that the global economy is performing poorly. The US economic indicators are positive and those of Europe in general are showing improving trends. "It is the emerging economies that are trailing in economic growth rates," he added. He noted that the low oil price scenario would result in oil companies reducing capital expenditure in both exploration and production. Pereira stressed that the effect of such an initiative would not be felt in the short-term, but at mid-term. "The supply chain, choked from a cutback in investments today (Thursday), will only feel the impact several years down the road. "So, whilst the short-term outlook for our business may not seem exciting, the long term forecast is good," he added. He said the global population required access to three basic elements to survive and progress, namely food, water and energy, and being in the energy business, the company had a long term position in global economic development. Pereira explained that the company's mission was to survive the low points in the industry, to benefit from the high points that followed. At 3.00 pm, Hibiscus was up one sen to 19.5 sen with 9.05 million shares traded. -- BERNAMA