Summary: Saudi Aramco is set to invite bids for at least US$1b of offshore fabrication work related to its Wasit gas programme. It is possible that Swiber may participate in the bidding, considering it is also looking at opportunities in the Middle East and has a JV partner in Rawabi Holding, a Saudi Arabian company that may increase its bidding chances. India’s ONGC has also re-opened the EPIC tender for its US$1.3b B-193 cluster fields’ development, providing more opportunities for contractors. Demand for field development work in Asia and the Middle East remains strong, although competition during the bidding process is fierce as well. Swiber has already gained a strong foothold in Malaysia, Brunei and India. Should it replicate its success in the Middle East, its prospects should be even brighter, assuming good cost control. With a stronger order book and a bright outlook for offshore field development, we maintain our BUY rating and S$1.38 fair value estimate. Risks include disruptions due to unexpected events, leading to cost overruns and lost revenue. (Low Pei Han)
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