KUALA LUMPUR: Cahya Mata Sarawak Bhd (CMS) is venturing into the energy sector via the acquisition of Scomi Energy Services Bhd’s oilfield operations for RM21mil.

       In a statement, CMS said two of its subsidiaries Cahya Mata Oiltools Sdn Bhd and Oiltools International Sdn Bhd, entered into four conditional sale and purchase agreements with Scomi Energy to acquire Scomi Oilfield Ltd together with various companies and assets within the Scomi Oilfield Group of Companies.

       “The proposed acquisitions, which are expected to be completed in the third quarter of 2022, represent a strategic investment with potential synergy with the group’s existing businesses as well as the opportunity to diversify into the global energy sector and grow its revenue and earnings,” CMS said.

       “The CMS management expects to leverage Oilfield Group’s global presence to expand the group’s clientele and serve as a bridge for the expansion of its existing businesses into the markets where the Oilfield Group has a presence,” it added.

       The group’s push into sustainability as a business strategy will benefit from Oilfield Group’s waste management services business and this business is expected to grow due to increasing drilling activity as crude prices remain elevated.

       “The additional benefit from the proposed acquisitions is that the group will not take on additional debt while drilling and waste management services are asset-light businesses. The asset light structure will be the core business operating model for future growth.

       “After weighing the risks and opportunities, the management considers the proposed acquisitions as a timely strategy to diversify into the global energy sector as there is potential for Oiltools to become an important contributor to CMS from the increase in overall drilling activities due to increased demand for oil and gas as well as the restructuring of the global energy supply chain,” it said.