Nam Cheong bags RM102.5 million in vessel charter contracts

[SINGAPORE] Sarawak-based offshore marine firm Nam Cheong has secured offshore support vessel charter contracts of up to RM102.5 million (S$32.7 million) from regional oil majors. 

The contracts have a firm period of up to two years, with options for further extension of an additional year, the company said in a bourse filing on Monday (Apr 6). 

An anchor handling tug supply vessel will be chartered to Offshore Oil Engineering, a subsidiary of Chinese oil major China National Offshore Oil Corp. It will commence operations in the first quarter of this year. 

Another maintenance work vessel will be chartered to a regional independent oil producer and is expected to start operations in early Q2. 

With the new contracts, 25 out of Nam Cheong’s 36-vessel fleet are now under long-term charters, raising its long-term coverage to 69 per cent.

Chief executive officer Leong Seng Keat noted that this is close to the group’s 70 per cent target. “(This) provides a good balance between earnings stability and room to capture upsides in the spot market,” he added.

Nam Cheong expects vessel utilisation to improve in 2026 as more long-term charters commence. 

Offshore activity, meanwhile, “remains robust in Malaysia as energy security becomes paramount”, the group said, noting state energy firm Petronas’ aim to “sustain domestic production at approximately two million barrels of oil equivalent per day through 2028”.

“Across South-east Asia, offshore support vessel supply continues to remain tight, driven by ageing fleet and minimal new-build activity,” it added. 

Nam Cheong shares closed 5.6 per cent or S$0.08 higher at S$1.52 on Monday, before the announcement.