The country is committed to ensuring a sustainable and successful oil and gas (O&G) industry through pro-business policies. Malaysia also aims to take full advantage of its strategic location at key shipping lanes as well as strong economic fundamentals in China, India and within South East Asia.
In recent years, Malaysia has created vibrant ecosystems which offer competitive rates and skilled manpower to support the growth of the upstream and downstream sectors while remaining competitive compared to other countries in the region.
There are over 3,500 O&G businesses in Malaysia comprising international oil companies, independents, services and manufacturing companies that support the needs of the O&G value chain both domestically and regionally. Many major global machinery & equipment (M&E) manufacturers have set up bases in Malaysia to complement home-grown M&E companies, while other Malaysian oil and gas companies are focused on key strategic segments such as marine, drilling, engineering, fabrication, offshore installation and operations and maintenance (O&M).
The declining global crude oil price which began in June 2014 has triggered a wave of cost reduction among upstream businesses. Global oil and gas companies slashed capital expenditures by about 40 percent and projects that are not profitability were either cancelled or deferred. PETRONAS as the Malaysia Regulator for the O&G industry has introduced many cost-cutting measures such as CORAL 2.0, and encourage merger & acquisition (M&A).
In this ‘new normal’ of low oil price environment, O&G companies has to prepare themselves by optimising operation, improving efficiency, and reducing cost as to sustain profitability.