Last Friday, Ranhil told Bursa Malaysia that its 60%-owned subsidiary was awarded an oil and gas exploration, development and production contract in West Java, Indonesia. The 4,440-sq km onshore site known as the Citarum block has the potential to produce 1 billion barrels of oil. Analysts, however, said contribution from the Citarum block would not be immediate, as the first oil production would only start in 2008. Mayban Securities in a recent note said it maintained Ranhill's fair value target at RM1.40, pending the release of its full-year results, although it had upgraded the stock to a “trading buy” as improved sentiment was likely to drive the stock higher. “We believe that an upward re-rating is on the cards for Ranhill, given this positive news,'' it said. Ranhill share price has plunged 45% this year on poor quarterly performance, which the company has attributed to lower construction revenue and losses by its manufacturing division. For the nine months ended March 31, 2005, Ranhill made a net profit of RM25.16mil, or 4.78 sen per share, versus RM35mil, or 9.86 sen per share, in the corresponding period last year. This was despite an improvement in revenue to RM955.6mil from RM602.6mil previously. The group is expected to announce its full-year results by the end of the month. Prior to the oil and gas contract news, Ranhill traded at a 3½-year low of RM1.17. “We are positive on Ranhill's ability, given the stiff competition for the contract from seven other bidders comprising international and established oil and gas players,'' said Mayban. “This fuels our optimism that the Citarum block is relatively more lucrative and should be Ranhill's biggest oil and gas breakthrough.'' PIN/MALAYSIA STAR