KUALA LUMPUR (March 2): Loss-making TH Heavy Engineering Bhd (THHE) said the settlement amount agreed between the group and PTTEP Sarawak Oil Ltd (formerly known as Murphy Sarawak Oil Co Ltd) was about RM16 million.

In a filing with Bursa Malaysia, THHE clarified that the amount owing by PTTEP to THHE's wholly-owned unit THHE Fabricators Sdn Bhd as at Dec 31, 2019 was about RM38 million.

"The settlement amount agreed between both parties through the settlement agreement is approximately RM16 million," it said.

"This settlement allowed both parties to look forward to a better future business relationship and to end the long outstanding dispute with PTTEP," the group added.

The Practice Note 17 (PN17) group was commenting on an article in the March 1 edition of the The Edge weekly entitled "THHE takes impairment hit on PTTEP contract".

THHE reiterated its earlier announcement on Feb 2 that the impairment loss for the amount due from the contract customer was about RM22 million.

The Edge reported that THHE had sought as much as RM112.74 million from PTTEP for a change order on a RM196 million engineering, procurement, construction and commissioning contract for top-sides at the Pernas oil field's PR-PA platform off the coast of Sarawak.

The contract was awarded in April 2013 and concluded in June 2014.

Murphy Sarawak was renamed as PTTEP after Thai state-controlled oil and gas conglomerate PTT Public Co Ltd acquired Murphy Oil Corp's Malaysian business for US$2.13 billion in June 2019.

THHE has been a PN17 company since April 2017, the second time it fell into the category. The first time was from February 2010 to October 2012.

THHE shares were up five sen or 5.56% to 9.5 sen in afternoon trading today, valuing the group at RM211 million.