Hilong Holding (01623.HK), an oilfield equipment and service provider, is seeking to boost its offshore engineering businesses overseas in a bid to offset a slowdown in the domestic market.
Weak crude oil prices have prompted firms such as PetroChina Co. (00857.HK), China Petroleum & Chemical Corp. (Sinopec, 00386.HK) and CNOOC (00883.HK) to reduce their capital expenditure, dragging down revenues of oil services providers.
To counter the business slowdown in China, Hilong has diversified its markets and stepped up focus on offshore engineering services in oil exporting nations, non-executive director and chief strategy officer Zhang Shuman (張姝嫚) said.
Such strategy will help the firm mitigate the risks induced by volatile oil prices, she said, according to the Hong Kong Economic Journal.
Hilong currently has presence in Ecuador, Nigeria, Kazakhstan and Pakistan, among other markets. Overseas operations account for about half its total business, while the rest is contributed by the three Chinese oil giants.
The company’s major clients overseas include Royal Dutch Shell as well as Schlumberger, according to Zhang.
Hilong generated 32 percent of its total income from offshore engineering businesses in the first half of this year, with the rest coming from oilfield equipment, oilfield services and oil pipe businesses.
The renminbi’s recent devaluation will benefit Hilong as the company’s expenditure is mostly in the Chinese currency while export revenue is in US dollars, Zhang said.
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