UAE’s Topaz Eyes South American Expansion Amid Oil Services Struggle

By David French

DUBAI, June 24 (Reuters) – Topaz Energy and Marine is eyeing enlargement into South America within the subsequent two years because the Dubai-based oil providers agency seems to be past the present difficulties within the sector brought on by the decrease oil value, its chief government advised Reuters.

Servicing firms are struggling as producers and explorers reduce on prices and capital expenditure to deal with oil costs buying and selling round 45 p.c beneath their June 2014 peak.

Topaz reported an 88 p.c stoop in first-quarter internet revenue, and Chief Executive Rene Kofod-Olsen anticipated earnings to proceed to be disappointing via the remainder of 2015.

“First half has been very tough for all of us and the second half will be moderately better but, I think, everyone in the industry should expect that 2015 will be a bad outlier for the past many years,” he mentioned.

Despite this, Topaz, a unit of Oman’s Renaissance Services believes it is able to climate the storm and make the most of alternatives to develop each its fleet and geographical presence past the Caspian Sea, the Middle East and West Africa.

South America is the primary goal, in accordance with Kofod-Olsen, with the largest draw being Mexico, which is opening up its oil business to extra worldwide involvement, and Brazil, the place the agency had beforehand operated however had pulled out as a result of it didn’t have the dimensions and relationships with Petrobras to make the enterprise work.

“We would go in if the working environment normalises and I believe there is a good chance that it will,” he mentioned of Brazil.

State-run Petrobras is embroiled in Brazil’s largest ever corruption probe which has seen dozens of high-ranking firm officers and politicians questioned over prices together with bribery and inflating the worth of contracts for private acquire.

Topaz can also be aiming to develop its subsea division over the following two years within the Atlantic basin, focusing on areas of medium depth, Kofod-Olsen mentioned.

Having mentioned in November it was in talks to accumulate two ships to reinforce its subsea division for supply in late-2016, Kofod-Olsen mentioned the agency subsequently renegotiated its offers and would pay considerably lower than envisaged as decrease oil costs and cut-backs by corporations in new orders had given it a greater negotiating place.

The firm has finance to again its plans, having signed a $550 million seven-year mortgage in April to refinance current debt at a less expensive price and to again enlargement.

As for merger and acquisition plans, Kofod-Olsen mentioned Topaz was open to alternatives to construct its presence in every area.

He noticed additional consolidation occurring throughout the business as corporations seemed to chop prices within the present strained working surroundings, particularly as oil majors squeezed their suppliers and servicing corporations. (Editing by Elaine Hardcastle)