9 local players among top 20 in region
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