SUMATEC Resources Bhd aims to strengthen its toehold in the oil and gas drilling business with the purchases of majority stakes in two Hong Kong companies.

Sumatec told Bursa Malaysia Bhd that the purchase of 51 per cent stake each in the two companies will make it a complete integrated services provider for the oil and gas sector in West Asia and Africa.

Last Thursday, Sumatec agreed to buy a 51 per cent stake in IR Oilrigs International for RM400,000.

The company said it had also agreed to buy 51 per cent of Hong Kong-registered IR Oilrigs Middle East for HK$5,100 (HK$100 = RM49.74).

Sumatec said IR Oilrigs Middle East Ltd’s subsidiary IR Oilrigs Middle East and Partners Co Ltd, which was registered in Saudi Arabia, has secured six contracts with Saudi Arabian Oil Co (Saudi Aramco) for the supply of six onshore drilling and workover rigs in Saudi Arabia on a daily rate basis.

The contracts are valued at about RM100 million a year for a three-plus-one year contract with total estimated revenue of RM400 million.

The contract is valued at about RM11 million a year.

Sumatec said the investment in IR Oilrigs International Ltd is not expected to contribute significantly to the earnings and net tangible assets of the company for the current financial year.

It said the stake purchases will be funded by internally-generated funds or bank borrowings.

Sumatec’s share price on Bursa Malaysia yesterday closed 2.5 sen lower, or 4.2 per cent, at 57.5 sen with 57,600 shares traded.