MALAYSIA`S O&G STOCKS SET TO PERK UP AFTER PM`S ANNOUNCEMENT

KUALA LUMPUR, Jan 12 (Bernama) -- Prime Minister Najib Razak's announcement
on over RM20 billion (US$6.45 billion) investment in the oil and gas (O&G) and
energy sectors is expected to perk up trading of the O&G stocks after being out
of the limelight for the last two years since the crash of the crude oil
price.

In a note Wednesday, OSK Research said the share prices of most O&G
companies were experiencing an upward re-rating due to the steady flow of
positive news.

Under the third update of the Economic Transformation Programme yesterday,
Najib said Shell Malaysia would invest RM5.1 billion (US$1.64 billion) in
multiple projects to upgrade, expand or build facilities in upstream, midstream
and downstream activities across Malaysia.

Meanwhile, ExxonMobil Exploration and Production Malaysia Inc, together with
its production-sharing contract partner, Petronas Carigali Sdn Bhd, planned to
invest over RM10 billion (US$3.22 billion) in new oil and gas assets to help
ensure reliable and sustainable energy supplies for Malaysia.

This was a follow-through from the announcement of new tax incentives under
the Petroleum Income Tax Act in November 2010.

Further activity in this sector would see Dialog Group Bhd leading a
consortium comprising the Johor government and Vopak to develop a RM5 billion
(US$1.61 billion) independent deepwater petroleum terminal project in Pengerang
in the southern state of Johor and the possibility of deploying nuclear energy
for Peninsular Malaysia.

OSK said ExxonMobil's investment should benefit brownfield services
providers like Dayang Enterprise Holdings Bhd, Petra Energy Bhd and Kencana
Petroleum Bhd.

"Also, the fabricators are likely to get a piece of the pie since the
multinationals may require the fabrication of new oil and gas structures to
replace existing ones that are now worn out.

"Here the potential beneficiaries are Marine and Heavy Engineering Holdings
Bhd and Kencana," it said.

It said Petra Energy, which has been awarded two contracts consecutively by
Shell, was expected to be the main beneficiary of Shell's investment.

"As for the wax plant and new diesel processing unit, we believe KNM Group
Bhd or even Dialog Group Bhd are the potentially winners," it said.

OSK said since the Pengerang centralised tankage facility project was
Dialog's project, the company was likely to be the only beneficiary, especially
on the construction and tank management side.

As for the nuclear development project, OSK said, KNM would be the
frontrunner, especially given its recent partnership with Aveng from Africa to
develop nuclear energy.
-- BERNAMA