Targeting RM800b oil ‘field’
By Eileen Ng, NST
KUALA LUMPUR: A one-stop centre to coordinate and promote the country’s oil field services and equipment (OFSE) industry, to be known as Malaysia Petroleum Resource Corporation, will be set up, said Deputy Prime Minister Tan Sri Muhyiddin Yassin.
This government body will look into creating an attractive business environment for industry players and investors.
“The government is in the midst of establishing the corporation to attract multinational companies by ensuring administrative ease as well as to promote Malaysian OFSE industry to overseas companies and investors,” he said in his speech at the 13th Asian oil, gas and petrochemical engineering exhibition (OGA 2011) yesterday.
Touted as the largest oil and gas show in the region, the event attracted some 1,500 oil and gas companies from over 50 countries, with products worth more than RM100 billion on display.
Saying that the global OFSE market stood at RM800 billion and had undergone an annual growth rate of 25 per cent in recent years, Muhyiddin said the Asian market for oil field services alone had grown by 20 per cent per year over the past decade, primarily driven by the shift towards more technically challenging fields and increases in the price of crude oil.
Currently, there were gaps in the domestic OFSE industry, with Malaysian companies lacking capabilities and experience, limiting their ability to gain a strong share in the regional market, he said.
Muhyiddin said Malaysia’s aspiration was to attract 10 to 20 major international companies to bring 10 per cent of their OFSE business operations to Malaysia.
“This could translate to around 40 per cent of their regional activities and would mean positioning Malaysia as a cost-competitive base for engineering, procurement and construction as well as a strategic base for installation activities in the Asia-Pacific region.
“As Malaysia is undertaking aggressive efforts and developing innovative solutions to drive the reserve growth and get more from existing fields, advanced technology and capability is crucial for us.
“International companies have the cutting edge technology and expertise to assist Malaysia in the deep water sector and exploration services. Our local oil and gas players can also grow their capabilities by working together with these international companies.”
He said Malaysia was targeting five per cent annual growth for the energy sector from last year until 2020. “This target translates into an increase of RM131.4 billion in the period from 2010 to 2020.
“There are significant number of business opportunities in the oil, gas and energy sector. Malaysia’s offshore producing fields are more mature than those of our Southeast Asian neighbours.
“There will be tremendous commercial opportunities for maintenance and replacement of assets in addition to development of new fields, which will continue to drive growth in this key sector.”
Muhyiddin added that another growing business opportunity was the regional midstream logistics market for oil and oil product storage, with crude oil consumption expected to grow by 420,000 barrels per day annually from 2010 to 2015.
Malaysia, he said, was well-placed to complement Singapore and collectively operate a hub similar to Amsterdam-Rotterdam-Antwerp.
“This hub can complement each other in areas of refining capacity, independent storage and blending capacity as well as access to markets.”
