KUALA LUMPUR – Malaysia’s oil and gas services and equipment (OGSE) industry has seen green shoots of recovery since the financial year 2019 (FY19), owing to a modest pickup in project activities and fewer impairments.
According to industry development agency Malaysia Petroleum Resources Corporation (MPRC), OGSE companies recorded large impairments over the last two years.
But, it said, financial data on the top 100 privately held and public-listed OGSE companies in Malaysia saw losses tapering off in 2019 amid a pick-up in activities.
“A preview of the top 100 OGSE companies (OGSE100) showed that the sector swung back into the black with a pre-tax profit of RM612.45 million in FY19 from a loss of RM1.87 billion registered in the previous year,” it said in a statement today.
OGSE100 analyses the financial performances of both public-listed and private companies to provide a wholesome “state of the industry” assessment to industry, policymakers and financial institutions.
Moving forward, MPRC president and chief executive Mohd Yazid Ja’afar said OGSE players would have to re-evaluate their playbooks and resilience in navigating the years ahead following the sharp drop in global oil demand due to the Covid-19 pandemic, coupled with the oversupply of the commodity.
“Industry players will also need to evolve in ways that contribute to efforts in digitalising the supply chain as well as reducing their carbon footprint,” he said.
Yazid noted that, globally, there is a gradual but consistent shift in policies to support the energy transition, encouraging the use of technology and renewable fuels.
At the same time, he said investors and sovereign funds had also joined the calls for decarbonisation efforts.
“Investors will be taking a harder look at the environmental impact of the oil and gas services and production through environment social governance-focused investing as the future energy mix takes shape.” – The Vibes, December 15, 2020
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