KUALA LUMPUR: After 12 years in the corporate wilderness, Tan Sri Halim Saad is now making a comeback as a major shareholder in Sumatec Resources Bhd.

Having withdrawn from corporate Malaysia in 2001 as part of the Renong-UEM takeover by Khazanah Nasional Bhd, Halim is now the key figure in turning around Sumatec with the injection of his oil and gas business located in Kazakhstan.

While staying out of the public eye, the former major shareholder of Renong Bhd and United Engineers (M) Bhd has expanded the presence of his Markmore group in Kazakhstan with close to RM300 million worth of investments made in that country.

Markmore group has local and overseas investments in oil and gas exploration and production (E&P), downstream operations and renewable energy initiatives.

While Sumatec is set to become Halim's first public listed vehicle in more than a decade, three weeks ago he hit the headlines after filing a lawsuit against the government and Khazanah for allegedly forcing him out of Renong in 2001.

While he refused to comment on the current legal proceedings, Halim was upbeat on Sumatec's prospects for the future.

"We expect to begin operations in October this year with an all new management team. The regularisation plan should see Sumatec getting out of PN17 by the second quarter of next year,” he said after the Sumatec EGM last Friday."The risk profile of our Shelly oil field project [in Kazakhstan] will decrease with time as more of our oil reserves get confirmed and certified,” he said.

At the EGM, shareholders voted to approve the injection of oil and gas assets by Halim and a proposed regularisation plan to take the company out of its current PN17 status.

Upon completion of a par value reduction exercise, Sumatec will undertake an issuance of 335 million new shares to identified investors at 17.5 sen per share.

The deal will see Halim emerge as a major shareholder with 150.4 million shares.

The remaining portion of the shares are to be allocated to Tan Sri Chua Ma Yu, Corston-Smith Asset Management and Tekad Mulia Sdn Bhd.

The issuance of new shares will raise around RM58 million for Sumatec, which will go towards paying off the company's debts.

Last year, two of Halim's companies and Sumatec had inked a joint investment agreement (JIA) to develop assets in the Shelly onshore oilfield in Kazakhstan that has a concession that lasts until 2025.

There are currently 47 wells in the oilfield, with five already operational and producing up to 1,000 barrels of oil per day.  

The deal will see Sumatec receive 100% of net income for the first two million barrels produced and 50% of net income thereafter.

Under the terms of the JIA, Sumatec will carry out all operations relating to petroleum production and to appraise, develop and produce the relevant reservoirs in Shelly.

The firm will also provide all the capital, machinery, technology and personal necessary for carrying out the operations.

Markmore has invested US$95 million (RM304 million) in Shelly with a view of producing a total of two million barrels by 2015.

Sumatec CEO Chris Dalton said that the company is focusing on mature oilfield assets which have a proven track record and lower capital risk.

"We are looking for fields which have a potential for an increase in reserves and reserves that are not yet taken out of the ground.

"Our vision is to become a leading Malaysia-based oil and gas company within the next five years,” he said.

Dalton said Sumatec will be looking for new acquisition opportunities in the mature assets segment globally.

In anticipation of the EGM, Sumatec's stock had risen by nearly 100% since hitting a one-year low of 16 sen on May 3.

Last Friday, the counter closed at 29 sen with 37.53 million shares done.

This article first appeared in The Edge Financial Daily, on June 24, 2013.