Blog

[KUALA LUMPUR] Once a crown jewel in Malaysia’s oil and gas sector, Sapura Energy is now teetering on the edge of collapse.

It came into being as a result of a high-profile merger brought together by two prominent tycoons, Shahril Shamsuddin and Dr Mahathir Mohamad’s son Mokhzani Mahathir, more than a decade ago.

But the Malaysian-listed company, which counts Permodalan Nasional Bhd (PNB) – one of the country’s largest state-owned fund managers – as its largest shareholder, is now drowning in billions of dollars in debt. Job orders have dried up amid expectations of softer oil prices, weighed down by sluggish demand and global uncertainties. 

Instead of securing lucrative contracts and competing on the global stage, as envisioned by the nearly RM12 billion merger that created the oil and gas powerhouse in 2012, Sapura Energy is now clinging to a rescue package from the government for survival.

The company is a shadow of its former self these days, with its shares languishing at a mere RM0.045 apiece – a stark contrast to their RM4.95 peak in December 2013, when optimism ran high that its strong connections would help it secure lucrative offshore contracts from state oil giant Petronas.