US $240mil Ranhill project in Sudan ready next month
RANHILL Bhd’s US$239.4mil project in Melut Basin, Sudan, is expected be fully completed by next month, following achieving the project's first oil production yesterday.
Achieving the first oil production was an important milestone for the project, indicating that the project was 85% to 90% completed, said president and chief executive Tan Sri Hamdan Mohamad.
“I've deliberately kept very silent on Sudan as I wanted to wait until the delivery of the first oil. There was speculation that we will not achieve first oil and our performance bond be terminated.
“Today I can categorically refute all those allegations,” he said after the company AGM and EGM in Kuala Lumpur yesterday.
He said the company had met its contractual requirements and did not risk losing its performance bond as reported a few weeks ago.
Due to challenges, which included transportation issue, the company did not achieve first oil as scheduled, leading to significant cost overruns for the company.
“We can't disclose the cost overruns as it may jeopardise our position, but we hope (in submitting our claims), not to end up in arbitration and hope to negotiate with the client as we have done our level best to help the client achieve its targets,” he said.
In its annual report, Ranhill said in fulfilling the contract to construct this major oil facility, it had incurred significant cost overruns but did not disclose any amount.
Hamdan said it would seek to recover these costs and had engaged a number of legal advisors and an international claims consultant to assist in finalising claims against its client Petrodar Operating Co Ltd.
Last June, Ranhill announced that its wholly-owned subsidiary Ranhill International Inc, together with Petroneeds Services International of Sudan, had won a bid for the engineering, procurement, construction and commissioning of a major oil facility in Sudan and a 250km water pipeline connecting Palogue and Al-Jabalyn. Ranhill holds 55% of the joint venture with Petroneeds.
The contract was awarded by Petrodar, whose major shareholders are Petronas Carigali Overseas Sdn Bhd with 40% and China National Petroleum Co International (Nile) Ltd holding 41%. Petrodar holds rights for exploration and development in Sudan.
For financial year ended June 30, 2005, Ranhill's revenue rose 88% to RM1.49bil from RM793mil, while its net profit fell to RM33.1mil from RM48.4mil the year before.
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