Its chief executive officer, Shah Hakim Zain, Wednesday said that OIL's international network covering 38 countries would allow a faster expansion of Scomi's core business of drilling.
"Previously, our target was to be present in two countries per year," he told a press conference after the company's annual general meeting (AGM) and extraordinary general meeting (EGM) here.
Scomi's proposal to buy 70.9 percent of OIL for close to RM300 million was approved by its shareholders at the EGM. Scomi has an arrangement to buy the remaining 29.1 percent stake in OIL through a put and call option, exercisable over a five-year period.
Listed on Bursa Malaysia Securities Bhd on May 13, 2003, Scomi has overseas operations in Sudan, Thailand, Myanmar and Pakistan.
The 40-year-old OIL on the other hand, operates in 29 countries and has market presence in nine other countries via its appointed agents. Its principal activities are in drilling waste management services, machine shop services and distribution of related equipment to the oilfield industry.
In addition, OIL owns patents over high technology products and possesses sole distributorship rights for certain best rated products that would enable Scomi to reposition itself as an integrated drilling fluids company.
Scomi is the only Malaysian company engaged in the highly specialized field of drilling fluids engineering, providing chemicals, engineering and drilling waste management equipment to the oil and gas industry.
Shah Hakim said with expertise in the "environmental side of drilling business" OIL is well positioned to take advantage of the rising number of countries which are becoming more aware of their environmental responsibility in the extraction of oil.
"The standard provided by Oiltools in serving the oil companies operating in the Gulf of Mexico and the North Sea is of high environmental standard.
"So this standard is coming to Malaysia and Asean countries which are high growth areas," he said.
The OIL's 70.9 percent acquisition, he said is expected to be completed either on July 2 or 3. "During now and then, we'll be going through the process of drawing down the loans for the acquisition," he said.
To finance the OIL's purchase, Scomi was reported to be finalizing a US$67 million (RM254.6 million) term loan while the balance would be paid through a bridging loan.
Disclosing that under the put and call option, Scomi would be buying another seven percent of OIL within the next three months, he said that the remaining equity in OIL could be acquired earlier than the five year period.
"Definitely we will buy. We can accelerate that if we want to," he said.
To a question, Shah Hakin said he was optimistic of a bright future for the oil and gas industry as the escalating oil prices had allowed extraction of oil at more difficult places more possible.
Petronas, he added was giving out more field development contract, whereas regionally, more field projects are coming in from Indonesia, Myanmar and India.
For the 2003 financial year, the Scomi group registered RM201.2 million in turnover while OIL recorded a turnover of US$160 million (RM608 million).
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