REUTERS - From hauling rigs to delivering toilet paper, firms from Southeast Asia are cornering lucrative niches of the oilfield services market to deliver growth that far outstrips that of much larger global peers.
SapuraKencana Petroleum and Ezion Holdings lead a group of top 20 Malaysia- and Singapore-listed companies that grew assets by 30 percent to US$8.4 billion last year, according to Reuters analysis of company data.
Their expertise ranges from laying steel pipes at the bottom of the ocean and moving huge rigs from the South China Sea to the Gulf of Mexico, to delivering provisions for the rig crews.
The breakneck expansion has driven the shares of SapuraKencana up by 30 per cent and Ezion by 36 per cent this year, outpacing gains in their local markets and for larger global rivals like Schlumberger and Technip.
But it also poses the largest risk for the sector as they run into bottlenecks ranging from talent to equipment.
"In many cases, they are squeezed with high costs and the need to provide competitive prices," Mark Mobius, executive chairman of Templeton Emerging Markets Group, told Reuters by email.
"Nevertheless, well-qualified companies with special technical capabilities and unique know-how can do very well and provide excellent profitability," said Mobius.
Many firms are heading to debt and equity markets to fund their asset buys. Singapore's Swiber Holdings, which owns the world's largest fleet of offshore construction vessels for shallow water and wants to venture into deepwater, is looking at Islamic bonds, or sukuk, after raising $754 million from corporate bond markets.
"You'll see more companies like ourselves looking at sukuk," Francis Wong, group chief executive officer at Swiber, told Reuters. "Because we have heavy capex spending, it fits very nicely into one of the models under sukuk which is asset based."
Ezion Holdings' market value more than quadrupled since 2011 to S$2.2 billion as it dominates the Asian market for lift-boats - a type of maintenance support vessel.
It has a 26-strong fleet of lift-boats and service rigs, up from two in 2010, and is expected to increase this to 31 in 2015, said CLSA analyst Saurabh Chugh in a report, citing Ezion and CLSA data.