KUALA LUMPUR (Jan 29): Investors have been nibbling at selected oil and gas (O&G)-linked counters on Bursa Malaysia, with several stocks trading at or near one-year high on the recent rebound in oil prices and improved work activities outlook in key sub-segments and Malaysia.

The Bursa Malaysia Energy Index, which tracks O&G companies, has risen 8.46% this year, making it the third biggest gainer among Malaysian sectoral indices after Utilities (16.9%) and Construction (9.69%).

Upstream service providers led the sector’s gainers on Monday, including Uzma Bhd (up six sen or 5.66% to its one-year high of RM1.12), Dayang Enterprise Holdings Bhd (up six sen or 3.27% to RM1.89), Petra Energy Bhd (up four sen or 4.04% to RM1.03) and Carimin Petroleum Bhd (up 2.5 sen or 2.6% to 98.5 sen).

Meanwhile, several other counters were also trading at their one-year high, including offshore support vessel (OSV) operator Icon Offshore Bhd (up 2.5 sen or 3.14% to a one-year high of 82 sen), and equipment manufacturer Wasco Bhd (up two sen or 1.7% to RM1.20).

The O&G counters’ rebound followed a recent sell-off in November-December 2023, which saw the Energy Index fall to its five-month low, tracking the decline in Brent crude oil prices to around US$73/barrel (/bbl) at the time, having traded at US$80-90/bbl in much of the second half of 2023 (2H2023).

The benchmark oil price was up 8.13% this year, trading at US$83.41/bbl at the time of writing, Bloomberg data showed.

Sentiment towards local O&G upstream service providers, especially on companies services local market, has improved since last year on oil prices support, higher activity levels in Malaysian waters, and subsequently improved charter rates enjoyed by vessel providers and rig operators.

In a recent interview with The Edge, Perdana Petroleum Bhd managing director Jamalludin Obeng reportedly said it will not be surprising if spot charter rates “have the same quantum of increase this year as in 2023” amid tight supply of Malaysia-flagged OSVs.

“Furthermore, many of the regional vessels are moving to the Middle East, where there is also strong demand from Aramco and Adnoc (Abu Dhabi National Oil Company),” Jamalludin was quoted as saying.

Malaysian O&G giant Petronas in its latest Activity Outlook reiterated its long-term target to grow its production to two million barrels of oil equivalent per day by 2025, compared with its current production of around 500,000 barrels per day of oil and 7,000 million standard cubic feet per day of gas.

The group expects 45 upstream projects to be executed in 2024-2026. Some 300 facilities are set to be improved in the same period, aside from 150 decommissioning activities, and 99 wells to be drilled — the latter in just 2024 alone.

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