9 lo­cal play­ers among top 20 in re­gion

New Straits Times - - Business -

KUALA LUMPUR: Nine Malaysian Oil & Gas Ser­vices and Equip­ment (OGSE) play­ers have made it to the top 20 com­pa­nies in the re­gion in terms of rev­enue and to­tal fixed as­sets, ac­cord­ing to the Malaysia Petroleum Re­sources Cor­po­ra­tion (MPRC).

Within the re­gion, eight OGSE play­ers in the list are from Sin­ga­pore, two from Viet­nam and one from In­done­sia.

“By and large, OGSE com­pa­nies in Malaysia and the re­gion were af­fected by pre­vail­ing in­dus­try con­di­tions. But we wanted to see how Malaysian OGSE com­pa­nies mea­sured up against re­gional peers.

“Us­ing th­ese fi­nan­cial data as an in­di­ca­tor, we found that Malaysian com­pa­nies have been catch­ing up with their re­gional peers in terms of rev­enue, and have sur­passed them in terms of to­tal fixed as­sets.

“Top Malaysian play­ers were not as se­verely af­fected com­pared with their re­gional peers. This is partly due to the con­cen­tra­tion of re­gional play­ers in up­stream capex seg­ments, such as fab­ri­ca­tion, and trans­porta­tion and in­stal­la­tion (T&I) ac­tiv­i­ties,” said MPRC se­nior vice-pres­i­dent Syed Azlan Syed Ibrahim.

Malaysian play­ers, he added, were spread across seg­ments, re­flect­ing the breadth of Malaysia’s OGSE sup­ply chain.

MPRC also re­vealed the top 100 rank­ing of the Malaysian oil and gas play­ers (MPRC100). MISC Bhd, Sa­pu­raKen­cana Petroleum and Dia­log Group Bhd made the top three spots.

Asked on the out­look for Malaysian oil and gas OGSE play­ers, Syed Azlan said the cur­rent down­turn taught oil & gas op­er­a­tors to be wary of their cap­i­tal spend­ing out­look.

“The days of unchecked spend­ing on prod­ucts and ser­vices are all but over. Cost ef­fi­ciency is key to sur­viv­ing in the new nor­mal.

“Petronas has shoul­dered its share of the pain, as re­flected by its earn­ings de­cline. Malaysian OGSE play­ers were af­fected as well, de­spite far­ing bet­ter than their re­gional peers. We ex­pect this year to re­main chal­leng­ing as ex­ist­ing con­tracts run out, re­placed by fewer and smaller new con­tracts on of­fer.

“Less com­pet­i­tive OGSE com­pa­nies will be sig­nif­i­cantly af­fected. None­the­less, it is crit­i­cal for Malaysian OGSE com­pa­nies to take im­me­di­ate ac­tion to re­shape their busi­ness models and cost struc­tures to face fu­ture chal­lenges.”

The re­port was col­lated from 1,866 Petronas-li­censed com­pa­nies, whose pri­mary busi­ness is re­lated to OGSE in the first full year of low oil prices of 2015.

The OGSE sec­tor’s fixed as­sets to­talled RM120.8 bil­lion in 2015, with 4.3 per cent on fixed as­set re­turns.

MPRC100 com­pa­nies con­tinue to hold size­able pro­por­tion of the sec­tor’s to­tal fixed as­sets, ac­count­ing for 96.9 per cent in 2015.

The in­crease in fixed as­sets dur­ing the year was driven mainly by con­struc­tion and de­liv­ery of new as­sets al­ready com­mit­ted in pre­vi­ous years.

... Malaysian com­pa­nies have been catch­ing up with their re­gional peers in terms of rev­enue, and have sur­passed them in terms of to­tal fixed as­sets. SYED AZLAN SYED IBRAHIM Malaysia Petroleum Re­sources Cor­po­ra­tion se­nior vice-pres­i­dent

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