SemLog in Iran oil and gas venture
Business Times, 28 March 2004
SEMBCORP Logistics Ltd, South-east Asia 's largest logistics firm, said yesterday it had entered into a joint venture to provide logistics and marine support services to energy firms in Iran .
The joint venture firm, SOPS Iran , will invest US$1.35million over the next few years to develop a logistics base on Kish Island in Iran , home to the world's second-biggest gas reserves after Russia .
"It's positive that they are able to expand their geographical reach given that they already have operations in Singapore , Indonesia and China ," said Jesvinder Sandhu, analyst at OCBC Investment Research.
SOPS will be 78 per cent owned by SenLog until Singapore Offshore Petroleum Services Pte Ltd and 22 per cent by Warner Offshore Corp, a marine services company in the Persian Gulf . Ms. Sandhu, who has a "market perform" on SembCorp Logistics, said she expected the venture to break even in two to three years although she added it was too early to assess the financial impact on the Singapore firm.
Offshore logistics accounted for about 14 per cent of SemCorp Logistics' earnings before interest and tax for the year to Dec 31, 2003 , she said. The bulk of its earnings come from managing companies' supply chains.
Shares in SembCorp Logistics closed unchanged at S$2.03 yesterday in line with a weak market. The stock has risen 17.5 per cent over the last six months, outperforming a 15 per cent gain in the last six months. - Reuters
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