Medserv has been re-awarded a contract by Eni North Africa (EniNa) to provide a logistics base and associated services for its exploration activities offshore and onshore Libya.
The contract, which comes into effect on January 1, is for a period of one year, with the possibility of extending for another year. The services are to be carried out at the company’s base at Malta Freeport.
This contract, in addition to the two-year major logistic and base support contract for offshore Libya activity announced earlier this year, consolidates Medserv’s business pipeline, and work levels for the Malta operation are expected to be high during the next three years.
Last week Edison Investment Research, an independent research body, published its trading update for the third quarter of 2016. The report issued indicates that, despite the very challenging macro environment, Medserv is maintaining a robust overall performance aided by the initial contribution of METS. The report states that Edison’s numbers are unchanged and they quote a fair value calculation of €2.03 per share.
Also last week, Medserv issued an interim directors’ report providing an update of the status of its international operations. The company maintained operations at its Tripoli office to support the work being done in Malta for Libya and plans to return to Libya as soon as the situation in the country allows it to do so.
Work levels for the Malta operation are expected to be high during the next three years
Meanwhile, its operation in Cyprus remains unchanged. The base in Larnaca is still in a mothballed position and discussions are ongoing with both clients and local authorities on the future of shore base services. The operation in Portugal is also in mothball mode and drilling operations are now expected to start in the first quarter of 2017.
The company also announced that it is very active in development work in new markets. A Trinidad office has been set up to develop business in the Caribbean region, where Medserv is participating in a tender bid for business offshore Trinidad. The outcome of this competitive bid should be known by the end of the year.
The company has also been accepted on the vendor list of a further two companies with operations offshore Trinidad which will allow it to participate in tenders expected to be issued in 2017.
Medserv Egypt is up and running with the office set up in Cairo. The company has been accepted on the vendor list of two IOCs operating offshore Egypt. The company reported that the first tender in which they may participate was expected to be issued this month.
The company also reported that the decision to invest in the Oil Country Tubular Goods market of the Middle East via the acquisition of METS has had a major impact on the group. Turnover and profitability in Oman are expected to surpass forecasts. The UAE is expected to reach the budget profit.
The Iraqi company has just completed the restructuring plan which allows METS Iraq to remain fully functional and work at breakeven as of October 2016.
Signs that the southern Iraqi oil and gas market is picking up continue to strengthen with international oil companies (IOCs) showing renewed interest. The synergy that exists in the product portfolio of both companies has started to deliver new revenue. The first contract for pipe testing was successfully completed in the Medserv Ħal Far Malta facility using technology and knowhow imported from METS.
Despite the fact that the first three-quarters of 2016 have proven to be challenging to the oil and gas industry and Medserv has had to respond and adapt to these market realities, the initiatives taken by the company to date have not only reduced the shortfall in performance but also placed the company in a position to perform strongly next year.
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