Barakah CFO resigns as struggling O&G firm under scrutiny

by SULHI KHALID / pic by TMR FILE

BARAKAH Offshore Petroleum Bhd has announced the departure of another senior officer as the oil and gas (O&G) service provider continues to face headwinds following the suspension of its licence by Petroleum Nasional Bhd (Petronas).

The loss-making company yesterday announced that its CFO Firdauz Edmin has tendered his resignation, giving a three-month notice as required by his term of employment.

Firdauz’s departure came after Barakah’s president Abdul Rahim Awang tendered his resignation last Friday.

The company said the duo’s departure were due to personal reasons without elaborating.

Abdul Rahim will be replaced by Nik Hamdan Daud, Barakah’s founder. He was the company’s former group president and CEO before resigning in April this year. He has a 15.7% stake in Barakah according to the company announcement on July 19.

Nik Hamdan, who has been in the O&G industry for 28 years, served as MD of German-owned offshore pipeline service company Pipetronix Sdn Bhd and founded Barakah’s subsidiary PBJV Group Sdn Bhd in 2000.

However, earlier this month, Petronas had suspended PBJV’s licence for three years due the nonperformance of a contract.

Barakah said following the suspension, Petronas including its subsidiaries and any petroleum arrangement contractors (PACs) will not award any new contract to PBJV during the suspension period.

Nevertheless, PBJV is allowed to continue and complete its existing and ongoing contracts with Petronas and its subsidiaries and PACs.

The suspension order by Petronas was a bitter blow to Barakah which had been a victim of the 2014 global oil price rout.

The company continues to suffer although it has been five years since global oil prices tumbled, erasing billions in market capitalisation of listed O&G companies, and displaced thousands of workers in the sector.

Many companies like Barakah are still reeling from the rout as aggressive expansion and huge debts continue to depress these firms.

Barakah is trying to resolve its Practice Note 17 (PN17) status by undertaking a regularisation plan which will involve capital reduction, asset disposal and share placement.

The Malaysian Reserve previously reported the O&G service provider intends to reduce its issued share capital from RM231.89 million to RM46.38 million.

Subsequently, it will result in RM185.51 million of credit that will be used to offset its accumulated losses, which stood at RM326.14 million as of end-May.

The group slipped into PN17 status after it failed to make repayments amounting to US$2.65 million (RM11 million) owed by Kota Laksamana 101 Ltd to Export-Import Bank of Malaysia Bhd.

Barakah also plans to dispose its pipelay barge, a marine vessel used for underwater pipe laying, to Singaporean ship bunkering company Lecca Group Pte Ltd for US$21 million.

The group’s shares closed 0.005 sen higher yesterday to RM0.065, valuing the company at RM54 million.

The company is involved in providing and carrying out onshore and offshore contracting works, such as pipeline pre-commissioning, commissioning and de-commissioning, pipeline installation, fabrication, hook-up, topside maintenance and other related activities.

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