Swiber set to clinch more contracts in Indonesia

Singapore-listed construction firm may have won a lucrative $200-m deal to build pipes and subsea structures in South Belut.

Swiber, through its Indonesian unit, PT Rajawali Swiber Cakrawala (PTRSC), is reported to have clinched a $200-m contract with ConocoPhillips for the installation of 20km of pipelines and other facilities begining 1Q14.

The industry grapevine is also whispering of another possible contract, this time an offshore installation project with Pertamina Hulu Energi.

What are the finer details of both looming contract wins?

Here's more from OCBC:

Indonesian unit may have secured US$200m contract. According to Upstream1, Swiber’s Indonesian unit, PT Rajawali Swiber Cakrawala (PTRSC), has won a contract worth close to US$200m linked to ConocoPhillips’ South Belut subsea development in South Natuna Block B off Indonesia. This involves engineering, procurement, construction and installation of pipelines and subsea structures plus modification to the existing North Belut facility.

Division of work. Swiber’s unit will install 20km of pipelines and two manifolds, umbilicals and jumpers, as well as other facilities; it has also roped in Kalimantanbased Meindo Elang Indah to handle the fabrication, hook-up and commissioning of additional topside modules at North Belut. According to Upstream, onsite installation for Swiber is targeted from 1Q14.

Interest in PTRSC has dropped to 23%. Recall that Swiber announced on 23 Apr this year that it sold a 26% stake in PTRSC for US$5.2m to PT Abadi Pelita Harapan, following which its interest in PTRSC fell to 23%. Hence its share of this latest contract win is estimated to be around US$46m (will not contribute to Swiber’s topline), and this is even before the division of work as mentioned
earlier.

More contracts to come? Upstream also reported that Swiber has emerged as the frontrunner in the tender for an offshore installation contract with Pertamina Hulu Energi for the development of the West Madura Offshore block. The group has been successful in clinching contracts, which have generally provided short-term support on the share price but have yet to reverse its longer-term decline, and this may be partly due to several earnings disappointments.

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