‘OIL PRICE SET TO RISE GRADUALLY NEXT YEAR’
However, players cautioned over ramping up upstream activities
THE oil price remains on a recovery track and will increase gradually next year based on its climb so far this year. However, local oil and gas (O&G) players should be cautious about ramping up upstream activities.
Malaysian Petroleum Resources Corp deputy chief executive officer Mohd Yazid Ja’afar said despite the oil price rally, O&G players should maintain a cautious outlook in view of the unpredictable landscape.
“The development of the oil and gas services and equipment (OGSE) industry is a long-term agenda and goes beyond cyclical oil prices.
“Therefore, we urge OGSE players not to lose sight of the need to sharpen their competitive edge and continue to muscle up for the long haul,” he told NST Business.
He also said robust business models were the key to navigate through price volatility.
In addition, players should look at growth prospects through strategic collaborations and diversification into the domestic downstream industry or venture into new export markets.
Velesto Energy Sdn Bhd president Rohaizad Darus said the oil price had bottomed out and found its sweet spot that would set a benchmark for the direction next year.
“When you look at the recent four months, changes on the global front had not impacted the oil price like they used to. I believe the price will start to pick up in the next six months to a year.”
Rohaizad said global oil inventory had been reduced significantly.
Deleum Bhd group managing director Nan Yusri Nan Rahimy said although oil price had reached a new high, O&G players needed to remain cautious and exercise discipline, particularly in maintaining cost structure.
“Looking at how the overall industry is reacting, we remain optimistic but it would take some time for any concrete manifestations to take place, probably in first half of next year.
“We hope activity levels, especially in the upstream sector, will continue to increase. However, this will strongly depend on the work plans that have been lined up by production sharing contract players,” he said.