Malaysia’s oil and gas industry has evolved tremendously over the last 40 years, and has truly come of age since the early days of naively witnessing the extraction of our oil and gas resources by foreign entities.
Within an industry now led by PETRONAS, a leading name among international oil and gas corporations, local players continue to grow and develop rapidly, in a bid to increase their competitiveness in a fast globalizing arena.
Since mid-2014, when oil prices plunged dramatically and reset the industry’s foreseeable outlook, it has become increasingly certain that Malaysian oil and gas players must refocus their growth strategies to include intensifying their resilience in the face of current and future adversities, and adopting robust risk management framework has become a prerequisite.
Over the years, PETRONAS has progressively taken on an increasingly influential role in shaping and guiding the Malaysian oil and gas industry, in a collective effort towards putting Malaysia on the world map as a serious oil and gas player, and ultimately contributing to the nation’s growth and development. In being able to play this role efficiently, PETRONAS first needed to confidently build up its own resilience, competitiveness and sustainability. In this process, the company continues to improve the viability of its key projects and increase value to all its stakeholders.
In the face of the current headwinds, radical change is necessary to press on with the efforts to grow and develop the local oil and gas industry. PETRONAS’ initiatives in this respect require conviction and support from Malaysian oil and gas players.
I am grateful for the strong show of support so far, with encouraging participation by partners and service providers in PETRONAS-led initiatives in response to the downturn. Most notably, the Cost Reduction Alliance, or Coral 2.0, which involves 25 Petroleum Arrangement Contractors (PACs). To date, this initiative has incurred total savings of RM3.4 billion since it was introduced – a significant achievement by any measure.
Despite the lower-for-longer outlook on oil prices, and in the interest of establishing growth levers for the industry, PETRONAS is committed to its key domestic growth projects, including the US$16 billion refinery and petrochemical integrated development, or RAPID, in Pengerang; the PETRONAS Floating Liquefied Natural Gas (PFLNG 1), a world’s first floating LNG facility to monetize molecules from stranded fields; and the Train 9 facility in Bintulu.
While aggressively pursuing these major investments in the midst of a difficult business environment may seem counter-intuitive, PETRONAS views the opportunity provided at this time to persevere through in favour of strengthening the industry as a whole, as an opportunity too valuable to pass over.
On this note, I applaud MOGSC for putting together this platform for the third time since 2012, which serves as a timely arena for meaningful discourse and engagement towards building a conducive oil and gas business environment, particularly during a period as challenging as the one we are facing together.
PETRONAS encourages MOGSC’s continued efforts to represent and champion the domestic Oil & Gas services sector, and is pleased to support MOGSEC 2016, one of MOGSC’s key initiatives in increasing the visibility of local industry players.