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Monday, August 22, 2011

DIALOG: Fund from Right Issue for future projects (CIMB)

In an interview, Dialog’s executive chairman and co-founder Ngau Boon Keat revealed that the recently-announced rights issue, which will raise up to RM640m funds, is not for the financing of the Balai marginal field or the Pengerang tank terminal. Instead, the intention is to arm Dialog with more financial resources to take up future projects.

• In addition to Malaysia, Dialog is eyeing upstream opportunities in Thailand and Indonesia.

• Ngau believes that risk-sharing contracts (RSC) are good for the sector and the country for two reasons 1) Petronas owns the marginal fields and is therefore able to enjoy the upside potential of the oil price. 2) The RSCs provide good training ground for local companies through partnerships with foreign players.

• Some RM90bn worth of downstream investments, i.e. oil refineries and petrochemical plants, are expected to flow into Pengerang, where Dialog is undertaking a 7-year tank terminal construction project. The terminal is expected to complement Singapore’s. (Edge Weekly)

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