Medserv results reflect disappointing market conditions in Libya
Medserv plc has registered a loss before tax of €680,589 compared to a profit of €141,137 achieved in the six-month period to June 30 last year.
In its financial statements, Medserv noted that it has continued to strengthen its expansion programme despite the difficult market conditions that have continued to prevail due to the security concerns in Libya.
“Significant progress has been registered in Libya with regards to the political situation after the successful elections of recent, although the security situation is still a concern,” chairman Anthony Diacono said.
“Libya has concentrated on resumption of production of existing facilities and oil and gas output has reached pre-war levels. However the return of International Oil Companies (IOC) to resume exploration is taking longer then expected, due to the security concerns. IOCs are now returning to Libya but with smaller budgets and fewer staff. It is obvious that they are carrying out preparatory work whilst waiting to see developments.”
The financial results for the first two quarters this year reflected the disappointing market conditions to date. However, business was expected to pick up in the final two quarters, he said.
After accounting for taxation, the company registered a net profit of €9,765 for the six months up to June 30. This contrasts with a profit of €125,697 for the same period last year.
“It is anticipated that the offshore industry will take off before the onshore activity as security is not a threat for offshore. Major oil company BP have lifted the force majeure and opened the way for exploration to commence 2013. This could be the catalyst to encourage IOCs to return to Libya and resume exploration. Medserv is well placed to participate in this activity from its base in both Malta and Libya.”
Medserv reported an optimistic outlook going forward, so much so that the company has made substantial investment in facilities and equipment to meet the increase in demand starting 2013. The company has now also finalised and signed the lease for the land for a new base in Limassol Cyprus to service the Eastern Mediterranean.
The Misurata base had not yet seen any new business from oil companies renewing operations. However, the company reported that existing fee income at the Misurata base was sufficient to support day to day expenditure.
While Libya was recovering from the war the authorities and oil companies concentrated on restoring existing oilfields onshore Libya to full production.
During this time the group had been preparing for the commencement of a number of large offshore Libya projects which have been in the planning stages for many years and which are planned to shortly enter the construction phase. Now that Libyan oil production has largely recovered to pre-war levels, increasing attention is being paid to these projects as the country strives to increase its production of fossil fuels to meet demand.
The Medserv Malta base was receiving shipments of material in preparation for commencement of these operations. Repairs to subsea structures and maintenance to platforms were also being carried out and Medserv Malta had secured a substantial maintenance contract to be executed this year.