Deputy Prime Minister Dato’ Seri Dr. Ahmad Zahid Hamidi speaks at the opening ceremony of OGA 2017.
The road to recovery could be near for the Oil and Gas industry in 2017, according to Dato’ Seri Dr. Ahmad Zahid Hamidi, at the OGA 2017 opening ceremony on Tuesday. The Deputy Prime Minister of Malaysia officiated the 16th Asian Oil, Gas and Petrochemical Engineering 2017 exhibition that involved 2,000 Oil & Gas companies from 60 countries at the Kuala Lumpur Convention Centre.
After Qatar, Malaysia is the second largest exporter of LNG in the world and the largest natural gas exporter in South East Asia, since 2015. As Malaysia’s key aspiration is to grow the oil field services industry by 2020, the government has issued various policies and incentives.
Ahmad Zahid stated that Entry Point Projects such as Enhanced Oil Recovery (EOR), regional storage solutions and unlocking of premium gas demand, are expected to contribute RM 131 billion in incremental Gross National Income and generate about 52,000 jobs by 2020.
He expressed hope that more possibilities for Malaysian companies will open up to take part in Qatar’s rapid development, as the country prepares to host the 2022 FIFA World Cup tournament.
“More Oil and Gas players are looking to move or set up their regional base in Malaysia, due to our relatively stable political and business environment, as well as competitiveness” he said. Malaysia is able to offer an educated and highly-skilled workforce, supportive business environment at a significantly lower cost in comparison to her neighboring countries.
Malaysia is currently focused on regulating energy efficiency measures and exploring green energy sources in order to transition into a “green economy” and guarantee the sustainability of the Oil and Gas industry.
With 2016 being the year of hard decisions, the industry remains resilient according to forecasts, such as the recent report from the Organization of the Petroleum Exporting Countries (OPEC). An optimistic outlook was painted for oil in 2017, as “global demand will rise to exceed current production” said Ahmad Zahid.
Results may be starting show, with Malaysia’s state giant PETRONAS. The company noted a 12% year-on-year growth in profit after tax, despite some revenues that were 17% lower. In 2016, they took measures to cut expenses, by reducing capital investments by 22% while “controllable costs” were cut by 8%, he said. PETRONAS emerged from 2016, as a more resilient entity due to their structure, cost reduction measures and improved performance.
Although many companies have either refurbished or upgraded their facilities, skills and expertise, if players can strategize effectively, there is no doubt they will emerge stronger and resilient once the oil prices recover in the predicted time, he added.