It's not all gloom and doom for the oil and gas sector

Here's how 5 listed firms can benefit from oil glut.

The market has been overly focused on low oil prices and beleaguered companies such that certain segments of the broader industry have been forgotten, says OCBC Research.

In the midst of all the doom and gloom, the research firm notes that companies catering to the downstream segment are still operating well, a few even turning around from previous years’ negative results. The oil glut, it adds, has led to a shortage of storage facilities around the world, and while the biggest beneficiaries are likely the domestically entrenched EPC
providers and terminal owners, there remains a chance that SGX-listed companies such as PEC Ltd, Rotary Engineering, Mun Siong Engineering and Hiap Seng Engineering can benefit as well.

Where are current opportunities?

According to OCBC, locally listed companies can look forward to places where they have a foothold in, such as Malaysia, Indonesia, and Thailand where construction of large oil terminals are still taking place.

 A new liquid bulk terminal will also be built in Jurong Port in Singapore, opening up opportunities for bidding, it adds. Furthermore, work is also being eyed in the Middle East, where PEC and Rotary have secured work in Fujairah in recent years.

"The biggest market probably lies in China, which is aggressively building up its strategic petroleum reserves after the drastic fall in oil prices – the country has 233m barrels of reserves1, representing 30 days of net crude imports and well short of IEA’s 90 days strategic reserve target – but we understand that margins are low and tough for foreign players to compete," explains OCBC.