KINIBIZ The collapse of crude oil price in the last 12 months is forcing many oil giants (to quote the usual biz speak) “rethink”, “reprioritise” and “reposition” their business plans drastically. Budgets are slashed. Expenditure reduced. Mega projects are postponed or scaled down.

In many cases, some may say that they are eating a long overdue humble pie.

Case in point is the recent move by Malaysia’s state oil company Petroliam Nasional Bhd (Petronas) to transfer ownership of four new liquefied natural gas (LNG) carriers to Malaysia International Shipping Corporation Bhd (MISC).

The carriers will be constructed for an estimated US$1.1 billion (RM4 billion) and are to be delivered to MISC in 2016-2017.

Petronas will then charter these LNG vessels from MISC for 15 years, or maybe even more.

The deal is practically an amendment to a deal that was signed two years ago. It novates or replaces a previous shipbuilding contract signed in 2013 between Petronas, MISC and Hyundai Heavy Industries (HHI).

In the old contract, Petronas ordered the four huge LNG vessels, with HHI as the shipbuilders, but only appointed MISC merely as project manager and technical consultant.

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This article was written by Khairul Khalid.