Malaysia’s OGSE industry revenue up 7 pct y-o-y to RM72.7 bln

Malaysia’s oil and gas services and equipment (OGSE) companies saw their revenue grow seven per cent year-on-year (y-o-y) to RM72.7 billion in the fiscal year ended December 31, 2022 (FY22), driven by higher contracting rates and asset utilisation amid the award of new contracts.

Citing its Top 100 OGSE Companies in Malaysia (OGSE100) FY22 publication, the Malaysia Petroleum Resources Corporation (MPRC) said 73.5 per cent of the industry revenue was contributed by the country’s top 100 OGSE companies.

“Non-OGSE100 mid-tier companies (MTCs) and small and medium-sized enterprises (SMEs) accounted for 13.8 per cent and 12.7 per cent, respectively of the industry’s overall revenue,” it said in a statement.

The report also disclosed that in 2022, the OGSE industry’s total population stood at 2,286 companies, comprising 100 OGSE100 companies, 1,945 nonOGSE100 SMEs and 241 nonOGSE100 MTCs.

“Of the 241 MTCs, 12 had grown from SMEs in the previous year, whereas 23 had reverted to SME status,” it said.

MPRC president and chief executive officer (CEO) Mohd Yazid Ja’afar said despite the higher revenue, the industry’s profitability in FY2021 had turned to a loss in FY22, weighed down mainly by impairments made by several OGSE100 companies, in addition to lower margins.

“Excluding the impairments, the industry and OGSE100 would have made marginal profits in FY2022,” he said in the report.

According to the OGSE100 FY2022 report, the OGSE industry registered a pre-tax loss of RM3.5 billion against a pre-tax profit of RM4.2 billion in FY21, mainly due to RM5.2 billion in impairment losses from several public-listed companies within the OGSE100.

Excluding the impairments, the industry would have registered a pre-tax profit of RM1.7 billion, out of which the OGSE100 accounted for RM974.4 million, the statement said.

Nonetheless, Mohd Yazid expressed optimism about the OGSE industry going forward, based on the latest outlook from Petroliam Nasional Bhd (Petronas).

Citing the Petronas Activity Outlook 2024-2026, he said Malaysia is forecast to see stable activity for drilling rigs, fixed structures, installation and projects, whereas commitments by Malaysia Petroleum Management will also drive plug and abandon activities.