Rex International’s oil play in Malaysia hit by rising equipment cost

OIL exploration and production company Rex International Holding ’s plan to develop oil fields in Malaysia under a pact with the country’s state-owned Petronas could hit a snag – high equipment costs amid elevated oil prices are dampening the project’s prospects.

“It (the Malaysian discovery assets) is still at the evaluation stage. There are certain things in the market that are a little bit difficult ... Because oil prices have gone up, (the costs of) services and equipment have also gone up. In order for us to put the Malaysian assets into production, we must find the equipment at the price level to ensure we make a profit,” said Rex’s executive chairman Dan Brostrom in an interview with The Business Times.

He added: “All the pieces have to fit together to put the well into production. We must make sure that we can make money out of the field developing plan.”