KUALA LUMPUR (Sept 8): Petroliam Nasional Bhd's (Petronas) efforts to renegotiate contracts with its vendors amid elevated crude oil prices are commendable and timely, said T7 Global Bhd chairman Datuk Seri Dr Nik Norzrul Thani Nik Hassan Thani.
"Most of the contracts we put out to bid before the Covid-19 pandemic had pre-Covid-19 pricing.
“However, during the pandemic, we saw that the cost of some items, like the cost of steel, went up like crazy. But when we did the bidding [for contracts], the pricing did not account for that. The renegotiation is definitely positive for us, and I think it is very fortunate and commendable that Petronas is willing to look at it and rethink the [bidding contract] price,” he said at a press conference, after the naming ceremony of the Bayan Mobile Offshore Production Unit (Mopu) here on Thursday (Sept 8).
Last week, Petronas announced that it is renegotiating contracts with its suppliers and contractors given the current high crude oil prices. In addition, the national oil firm also wants to ensure that contract terms are fairly shared between the group and suppliers and contractors.
Asked if T7 Global is facing competition from other oil and gas companies, Nik Norzrul Thani said the group had developed a strategy to find a niche from which T7 Global could benefit.
"The Mopu is one of them. Oil and gas are [a] large area and you need to know where you are. We cannot spend our resources trying to go across the board, and we have to be selective in participating areas, thus giving you a premium but, at the same time, our capabilities are also there," he added.
"More importantly, we are also not heavily leveraged. We had a bit of a buffer, so we did not have to restructure our funding or loans, as we had less reliance on leveraging on debt. Because of that, we were able to prosper during Covid-19," he added.