SHAH ALAM: Sumatec Resources Bhd, an engineering, procurement, construction and commissioning (EPCC) company, is bidding for some US$250mil worth of oil and gas contracts in Vietnam and Thailand.

Group managing director James Chan said it was negotiating a few contracts, and expected overseas contribution to revenue to increase to 60% from 30% currently.

“Based on past record, the company has a success rate of 25%-30% in its bidding process,” he told reporters after the company AGM yesterday.

The company's current order book stands at RM300mil, mostly in oil and gas projects.

Despite oil prices soaring to an unprecedented high and impacting raw material prices, Chan was bullish on the company's prospects and expected group revenue to move in tandem.

“We expect revenue from the shipping division to increase to RM100mil and EPCC contracts to reach RM200mil by year-end,” he said.

He expected smaller contractors to be weeded out in the face of stiff raw material prices and competition.

“It is going to be challenging times with the big increase in raw material prices. It is going to affect margins and it would also be more expensive to finance the projects.

“A lot of small and weak contractors will be flushed out. That's an opportunity for us - less competition,” he said.

The company is currently working on a methanol plant in Labuan, a tank farm in Turkmenistan, a jet fuel terminal project in Cambodia and, locally, biodiesel and bitumen projects in Kemaman.

On the Sabah Gas Terminal project in Kimanis worth more than US$300mil, Chan said: “The job would most probably be awarded next year.”

He said the group's long-term strategy was to be an integrated biofuel player in three to five years.

“With the current high oil prices, we have potential in this business,” he said, adding that the company planned to own a jatropha farm and “green energy” production plant and was currently in talks with foreign and local state governments for the lease of land for this purpose.