Kencana Petroleum and Mermaid Drilling Team Up
Mermaid Singapore was incorporated in Singapore on February 27, 2007 with an issued share capital of US $1 divided into 1 ordinary share with a par value of US $1. Mermaid Singapore is wholly-owned by Mermaid Maritime Public Company Limited, a company based in Thailand. Mermaid Maritime group of companies is principally involved in the provision of drilling and subsea engineering services for the offshore oil and gas industry.
KPV was incorporated on September 5, 2007 as a private company limited by shares under the Companies Act, 1965 with an authorized share capital of RM1,000,000 divided into 1,000,000 ordinary shares of RM1.00 each and a paid up share capital of RM2.00 divided into 2 ordinary shares of RM1.00 each. KPV is principally involved in investment holding, management and related services in oil and gas industry.
KMD would be incorporated in Malaysia as a private company limited by shares under the Companies Act, 1965 with an authorized share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each and an initial paid up share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each. The shareholding of KMD shall be in the ratio of Mermaid 40% and KPV 60%.
The shareholders agreement enables Kencana Petroleum Group to expand its oil and gas services into provision of offshore drilling and drilling related services in the oil and gas industry through the operation of offshore drilling rigs in Malaysia. The agreement allows Kencana Petroleum Group to have access to the technology, expertise, experience and resources of Mermaid Maritime Group in the provision of drilling and drilling related services. The Mermaid Maritime Group has been in the offshore services business for 25 years.
Oil and gas industry activities are likely to continue to grow as evidenced by the sustained high demand and high global market price for hydrocarbons. As such, exploration and production activities for oil and gas are expected to continue to be robust in line with the high demand and market price of hydrocarbons. This should augur well for the business prospect of KMD as sustained robust activities in the exploration and production activities are expected to provide continued high demand for drilling and related services.
The risk factors include the market price of oil which will affect the level of exploration and production activities, laws and regulation requirements, and competition from the existing service providers.
The shareholder agreement is not subject to the approvals of the shareholders of Kencana Petroleum and/or any regulatory authorities. The subscription of shares by Mermaid in KMD will however, requires the approval from the Foreign Investment Committee.
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