Platinum NanoChem Enters JV with Scomi Oiltools
Published on April 8, 2014 at 6:54 AM
Graphene NanoChem, the performance nanochemicals and advanced materials company, is pleased to announce that Platinum NanoChem Sdn Bhd, its wholly-owned subsidiary has entered into a joint venture (“JV”) with Scomi Oiltools Sdn Bhd (“Scomi Oiltools”) to produce and supply a range of speciality chemicals, including PlatDrill and other graphene-enhanced green chemicals, exclusively for the oilfield chemicals market.
Scomi Oiltools is a subsidiary of Scomi Energy Services Bhd (“Scomi”), a company listed on the main board of the Malaysian stock exchange, one of the world’s leading oilfield chemicals solution providers.
Graphene NanoChem is licensing its technology to the JV in accordance with its licensing strategy detailed at IPO
The licensing agreement to be entered into with the JV will allow the production of a range of high value, speciality chemicals, including graphene-enhanced drilling fluids and additives, as well as base chemicals produced using the Group’s proprietary nanotechnology
The 50/50 joint venture will service the growing US$21 billion global oilfield chemicals market
The first phase of the JV is the construction of a 45,000 MT per annum of multi-function production chemical plant and a 30 MT per annum graphene nanomaterial plant – to be completed by the beginning of 2016
The second phase of the JV includes the production of high value proppants and enhanced oil recovery products to target Scomi’s captive chemical market space
The JV will have access to Scomi’s existing customer base which today has an order book of RM4.6 billion (£844 million)
Capital expenditure for the JV will be RM80 million (£14.7 million) to be funded 70% by debt
Graphene NanoChem’s equity component of capital expenditure is RM12 million (£2.2 million) to be funded from internally generated sources.
Jespal Deol, Chief Executive Officer of Graphene NanoChem, commented: “We are delighted to announce this JV agreement with Scomi Oiltools. This is the outcome of two years of joint development with Scomi Oiltools, which has expanded far beyond the scope of the initial collaboration on graphene-enhanced drilling fluid. It is a credit to the Company’s ground-breaking nanotechnology that we have been able to enter into a joint venture, with assured supply and procurement arrangements agreed. As well as revenue from the JV resulting in a material uplift to the Group’s results from 2016, we will also be targeting new opportunities within Scomi’s operations. We expect this JV to be a model that we can replicate in a number of other applications.
“The addition of Graphene Nanochem’s proprietary know-how, chemicals expertise and nanomaterial production capability will uniquely position the JV to benefit from the regulatory drive to utilise green, safe-to-use chemicals and the need for better performance additives for the oil and gas industry.”
Wan Ruzlan Iskandar Wan Salaidin, President – Market Units of Scomi Oiltools, commented: “Collaboration with companies such as Graphene NanoChem allows Scomi to offer cutting-edge value propositions that enable our customers to benefit from efficient drilling, using enhanced products in a safe manner, whilst protecting the environment. We are well positioned now to capitalise on the growing global oil and gas chemicals and formulation market. The JV aims to capture market share and is positioned at the higher end of the formulation market in an industry that has recently seen an increasing level of backward integration into the chemicals and formulation space.
“Scomi and Graphene Nanochem will bring together their complementary skills to lead innovation in this area. Along with the production of a wide range of drilling fluids and production chemicals, over time, we hope to expand the collaborative innovation to other product areas and geographic markets.”