Dubai: Topaz Energy and Marine expects to expand in Kazakhstan and the Middle East as the Dubai-based oil services company projects better growth for the industry next year with oil prices stabilising around $50 (Dh184) a barrel, its chief executive said.

A sharp drop in crude prices since mid-2014 has forced oil producing and service firms to re-evaluate projects worth billions of dollars and cut costs. Companies are looking at forming alliances to reduce risk.

“The industry is becoming smarter ... We are in most offshore fields today, in an environment where $50 Brent is actually giving positive cash flow,” Chief Executive Rene Kofod-Olsen said in an interview on Thursday.

“We believe that we are in a trough — we will enter an environment in which investments will start flowing ... While 2017 is a tough year, 2018 is probably going to be a significantly better year for the oil and gas service industry in general than the last two years have been.” The company reported last week a net loss of $13.4 million for the first half of this year, compared to a year-earlier profit of $800,000. Revenue fell 23 per cent to $115.6 million.

Topaz, a unit of Oman’s Renaissance Services, operates in the Caspian Sea, the Middle East and West Africa. In the Gulf, it works with state oil giants such as Saudi Aramco and Abu Dhabi National Oil Co (Adnoc).

“I don’t believe that we have enough market share in Saudi Arabia — we can grow market share there. I believe that we should grow market share in the UAE, and would like to participate in the newer exploration areas. Certainly it is something that we look at,” Kofod-Olsen said.

Ramp up output

Topaz has been working at Kazakhstan’s Tengiz and Kashagan oilfields. The Kashagan offshore field in the Caspian Sea is set to ramp up output further in 2017 and more next year.

“We have historically been servicing the Kashagan field.

Next year we believe they will have the next phase ... We will hopefully be considered for that as well.” The company issued $375 million of five-year bonds at a yield of 9.125 per cent in July. Kofod-Olsen said the company did not plan to refinance its existing bonds next year “but if the whole world improves and so on, we could definitely refinance in two to three years for sure”.

Topaz does not have any imminent plans for an initial public offer of shares. It planned a London listing in 2011 but did not go through with the offer because of valuation concerns and regional unrest.

“We are seeking to run the company as close to a public company as possible, also because we have debt in the capital market,” said Kofod-Olsen.

“Right now we don’t have an imminent plan for doing an IPO but it is something we are following, of course.”