Business

Wednesday April 16, 2008

Sime: No cost overruns at Maersk Oil Qatar project




KUALA LUMPUR: Sime Darby Bhd said on Wednesday there were no cost overruns for its on-going offshore project for Maersk Oil Qatar (MOQ).

It refuted recent reports that its unit Sime Darby Engineering has incurred cost overruns of between RM120mil and RM150mil for the project involving engineering, procurement, construction, installation and commissioning (EPCIC).

“Work on the project is ahead of schedule and is being carried out within contracted terms,” it said.

Maersk Oil awarded Sime Darby Engineering the EPCIC contract to build and install a process platform, a utility platform and three bridges off the coast of Qatar in February last year.

With regard to all projects, Sime Darby Engineering has been tracking the global trend of rising prices of commodities and raw materials.

“And it has made provisions for higher cost of raw materials such as steel in the all these projects. This was done in the interest of best practices of prudent accounting.

“Thus, Sime Darby Engineering does not foresee the need for any further provisions in this financial year,” it said.

Given the present scenario, Sime Darby said it did not anticipate any impact to the group results for the financial year ending June 30, 2008.

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