KUALA LUMPUR, Jan 6 — Kenanga Research maintains its “overweight” call on the oil and gas sector as it believes the sector will continue to be in overdrive this year.

The research house said that overall the sector did spectacularly last year, with stocks under its coverage gaining an average 75 per cent on year-to-date basis.

“Main winners for the year were stocks like Alam Maritim, Barakah Offshore, Dayang Enterprise, Uzma and Yinson Holdings, which turned in more than 100 per cent share price appreciation,” Kenanga Research said in a note today.

The share price gains were no surprise, Kenanga Research said, adding that around RM30 billion of domestic contracts were dished out in 2013, a far cry from the RM10 billion contract wins in 2012.

More contracts are to come in 2014, it added.

Timing-wise, offshore support vessel (OSV) and jack-up rig contracts could be in the forefront as many OSV contracts have been up for tender since the end of the third quarter last year, Kenanga Research said.

The research firm said the jack-up rig scene would continue to heat up as many of the Malaysian new jack-up rigs would be entering the market come mid-2014.

“In our view, it’s just a matter of time before more contracts and projects, which were delayed, are finally awarded to the players,” Kenanga Research said.

It said fabrication projects could be staggered across the year but they would emerge by early second quarter of this year or by mid-2014.

“It is slightly tougher to project when headline risk-service-contracts and chemical enhanced oil recovery contracts will emerge but given that such projects are imperative to the domestic oil production, all efforts are geared for the contracts to be awarded,” said the research firm.

Assuming a positive decision on the final investment decision for the Refinery and Petrochemical Integrated Development (RAPID) project, Kenanga Research said the downstream-related stocks would enjoy renewed investors’ interest.

The final investment decision for RAPID project is expected by the first quarter of this year.

“Given its significance to the Malaysian economy, we believe that all efforts will be taken to ensure that the project is good-to-go,” said Kenanga Research.

In anticipation of a more positive outlook for Pengerang, the research house said the Dialog Group Bhd would likely move ahead with the liquefied natural gas terminal for the Pengerang project. — Bernama