Dialog-Petronas Mutiara cluster deal to drive long-term growth
KUALA LUMPUR: Dialog Group Bhd's newly awarded production-sharing contract (PSC) for the Mutiara Cluster Small Field Asset (SFA) with Petroliam Nasional Bhd (Petronas) is expected to strengthen the group's upstream portfolio and support its long-term growth trajectory.
CIMB Securities said currently, Dialog operates three producing assets, namely the Bayan oilfield service contract, the D35/D21/J4 PSC, and the L53/48 concession in Thailand.
It is also progressing with the BJC SFA PSC, following Petronas's final investment decision approval in January, with first production slated for January 1, 2027.
"In addition, the group is in the pre-development phase for the RAJA Cluster SFA, awarded in December 2024. If the RAJA and Mutiara clusters prove commercially viable, Dialog's upstream portfolio could grow to six assets, providing stable income over the next decade," it said in a note today.
The firm said Dialog's upstream segment currently contributes about 35 per cent to the group's bottom line.
While limited details have been disclosed, it estimates capital expenditure for the Mutiara asset to range between US$10 and US$20 per barrel of oil equivalent (boe), depending on reserve size and water depth. This is broadly consistent with other marginal field developments in Malaysia.
"With a total capex of US$235 million, this translates to roughly US$9.46 per boe, which is within the expected cost range for similar assets," it added.
Although the deal will not deliver immediate earnings, CIMB Securities views the development as a positive strategic move to deepen Dialog's upstream footprint.
"We maintain our earnings per share forecasts, 'Buy' call, and target price of RM2.50," it said.
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