Previous RSCs have been amicably terminated it appears.....fingers crossed this happens here.
Feb 2016 - first RSC termination
PETALING JAYA: AmResearch said the termination of a small risk service contract (RSC) in which Dialog Group Bhd has a 32% stake will not result in the company incurring any significant impairment provisions.
“As the group’s losses of US$10 million (RM41.7 million) have already been substantially provided in the past quarterly results, we do not expect any significant impairment provisions for this cessation,” it said in a note last Friday.
The research house noted that the termination was not unexpected given the high operating costs for marginal fields.
However, it understands that Dialog’s Bayan enhanced oil recovery project is unlikely to be affected. Dialog has a 50:50 joint venture project with Halliburton to enhance the recovery of oil at the matured field.
With the termination, the joint venture entity BC Petroleum Sdn Bhd will receive the remaining capital expenditure reimbursement within the first half of 2016, which will enable Dialog to fully repay the external borrowings raised for this project.
AmResearch said it has not incorporated any earnings contributions to Dialog at this stage as the project derives its share of the enhanced output levels when the production level on matured oil fields is raised above a stipulated quantum.
Besides Dialog, other shareholders of Balai small field include Roc Oil Malaysia (48%) and Petronas Carigali (20%). The RSC, which was awarded on Aug 16, covers four fields such as Balai, Bentara, Spaoh and West Acis.
Earlier estimates for the project involve costs of US$200 million to US$250 million (RM823 million to RM1.03 billion) for pre-development and an additional RM600 million to RM750 million for subsequent development.
While both the Balai and Bentara fields in the cluster had already achieved first oil production in November 2013 and May 2014, the continuation of this project has become financially unfeasible due to the current low crude oil price environmen
And July 2016 - second RSC termination was the Berantai RSC
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