Uzma Berhad, a Malaysian upstream oil and gas services provider, disclosed Monday that its 40 percent associate company, Sazma Aviation Sdn. Bhd (SAZMA), has been awarded two contracts May 21 by Petroliam Nasional Berhad's upstream arm PETRONAS Carigali Sdn Bhd (PCSB) for operations in East Malaysia, the firm said in a filing with local stock exchange Bursa Malaysia.
The first contract, valued at $3.5 million (MYR 12.5 million), involves the provision of helicopter services for a well drilling campaign in East Coast of Sabah, East Malaysia. PCSB has an option to extend the six month-long contract, which is effective from May 15 to November 14, by 3 months to Feb. 14, 2016.
The second contract, worth $42.6 million (MYR 154 million), requires SAZMA to provide aviation services for PCSB's Sabah Operations (SBO). The five year SBO contract runs from March 23 to March 22, 2020, with PCSB holding an option to extend the deal by one year to March 22, 2021.
"The execution of the contract is depending on work orders to be issued by PCSB from time to time. It is the prerogative of PCSB to decide the timing on the requirement of the equipment and services. Hence, any delay in issuing work orders will lead to delay in revenue recognition," Uzma said in the announcement.
It added that the projects "could become sub-economic if crude oil dipped below $25-30 per barrel."
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