KUALA LUMPUR, Sept 8 — Energy solutions provider T7 Global Bhd said the move taken by Petroliam Nasional Bhd (Petronas) to renegotiate contracts with its vendors is commendable and timely in the midst of high crude oil prices.

T7 Global chairman Datuk Seri Dr Nik Norzrul Thani N. Hassan Thani said contracts bid during pre-Covid-19 period hedged at prices of that time. However, prices of certain items such as steel during the pandemic had risen significantly, and the bidding cost did not account for that.

"We think it is very fortunate and commendable that Petronas is willing to look at it and rethink the price.

"This is the question of being fair to both parties,” he told reporters after the naming ceremony for the group’s Bayan Mobile Offshore Production Unit (MOPU) here today.

Nik Norzrul Thani said the move also showed the sensitivity of Petronas to the realities of doing contracts.

Recently, the national oil firm said it is renegotiating contracts with its suppliers and contractors given the current crude oil prices.

Petronas president and group chief executive officer Datuk Tengku Muhammad Taufik Tengku Aziz said the group is looking at contract strategy as well as access to finance and the group would always take into account the market it is competing with.

However, he did not specify when Petronas will complete the renegotiations.

Asked whether T7 Global is facing heightened competition from other oil and gas players, Nik Norzrul Thani said the group has strategised itself to find a niche that would benefit T7 Global.

"MOPU is one of them. Oil and gas is a large area and you need to know where you are. We cannot spend our resources trying to go across the board and we have to be selective in the participating area thus giving you premium but at the same time, our capabilities are also there,” he added.

Historically, Nik Norzrul stressed that T7 Global was able to get contracts and be in the black during the lower crude oil prices.

"More importantly, we are also not heavily leveraged. We had a bit of a buffer, so we did not have to restructure our funding or loans as we were less reliant on leveraging on debt. Because of that, we are able to prosper during Covid-19,” he added. — Bernama