KUALA LUMPUR (AFX-ASIA) – Oil and gas stocks have gained in recent weeks as investors remained bullish that companies that provide support services for oil and gas exploration will benefit from a further RM1.6 billion investment by Murphy Oil, dealers said. (US$1=RM3.8).

Earlier, Murphy Oil Corp unit Murphy Sarawak Oil Co Ltd’s operations manager Steward Seatter was quoted in local media as saying that the company plans to invest RM1.60 billion in Malaysia next year, to further explore and develop both shallow and deepwater oil blocks in the country.

Crest Petroleum, Petra Perdana, Scomi Group and Wah Seong have been rising on the news.

“There is still a lot of interest in oil and gas stocks, …. a lot of speculative interest and because of the news about Murphy Oil making more investments here,” said a dealer with a local brokerage.

He said there is some profit-taking but the selling pressure on these stocks was well absorbed.

He added that investors were buying stocks of companies that provide support services for oil and gas exploration because they expect these firms to secure some new contracts from Murphy Oil.

The dealer said sentiment remained bullish on oil and gas stocks although the share prices of these issues had run up significantly in the past weeks.

Dealers said the oil and gas stocks also extended their gains over the past few days following a report which said national oil company Petronas has identified more than 30 marginal oil and gas fields, out of which about half will be given to a local consortium to explore and drill.

This comes on the heels of Prime Minister Mahathir Mohamad’s announcement during the 2004 Budget that the government will allow another consortium to undertake oil exploration, production and refining.

“It looks like the prime minister’s plan announced in the budget for other local parties apart from Petronas to undertake oil exploration is moving faster than expected,” a local brokerage dealer said.

Sources said Petronas expects to finalise the list of oil wells in two weeks.

“These companies are speculated to be the members forming the consortium,” the dealer added.