Kuala Lumpur: Malaysia’s oil and gas services and equipment (OGSE) companies have been urged to consider strategic partnerships to be more competitive and capitalize on energy transition opportunities beyond the industry.

According to BERNAMA News Agency, Malaysia Petroleum Resources Corporation (MPRC) senior vice president/operations head Mustafa Akbar Reza emphasized that the focus on strategic partnerships represents a shift in industry consolidation.

“The idea is that there are many OGSE companies and each company is concentrated on one business. The term ‘industry consolidation’ did not fully capture the opportunities available for OGSE companies to build capacity and capability and was too restrictive in terms of what we want to achieve in the industry,” he stated in an interview ahead of the launch of the Mid-Term Review of the National OGSE Industry Blueprint 2021-2030 (OGSE Blueprint) report.

Launched by the Ministry of Economy in April 2021, the OGSE Blueprint aims to develop a robust, resilient, and globally competitive Malaysian OGSE sector. In 2023, 3,392 OGSE companies were licensed and registered by Petronas under the Standardised Work and Equipment Categories (SWEC).

Mustafa noted that strategic partnerships would help OGSE companies diversify and compete better, especially outside Malaysia, which can also help them broaden their customer base. The MPRC is committed to driving strategic partnerships forward and is looking to implement a series of programs to enhance the competitiveness and resilience of OGSE companies. Details will be shared during the OGSE mid-term review launch, he added.

Mustafa also mentioned plans to introduce a key component of strategic partnerships on March 20, potentially involving the signing of memoranda of understanding or formal agreements. He highlighted that technology adoption has historically been an area where OGSE companies lagged but noted that efforts to boost it have gained traction since last year. New developments under the OGSE Development Grant to support technology adoption will be announced.

Since the OGSE Blueprint’s launch in 2021, RM20 million has been allocated through the OGSE development grant, benefitting 64 companies, with 22 companies successfully commercialized and generating a combined revenue of RM38.3 million. Mustafa pointed out that the OGSE development grant has not seen enough representation from Sabah and Sarawak, and MPRC plans to collaborate with stakeholders in these states to address the issue.

The mid-term review report, conducted by MPRC, evaluates progress and ensures the industry remains aligned with national priorities and adapts to the evolving energy landscape. Mustafa emphasized that the majority of OGSE companies are small and medium enterprises, making the OGSE Blueprint’s impact significant in addressing challenges such as upskilling talent, technology adoption, and access to finance.

Key milestones achieved since the OGSE Blueprint launch include bridging the talent gap and creating a one-stop source of information for OGSE companies. Around 600 individuals have been trained under coaching and mentorship programs, with more than 300 upskilled and certified in technical disciplines.

Additionally, the launch of the i-OGSE portal in 2023 provided information on financing and export programs, channelling grants and assistance to over 60 companies. Eight new or expansion projects have been approved by MIDA, attracting multinational investments and recording RM2 billion in potential export sales via MATRADE-led initiatives.

Since 2021, some OGSE companies have gradually shifted to new sectors in the energy transition, venturing into solar and other renewable energies. Mustafa noted this marks a major milestone in the evolution of the OGSE sector, aligning with the industry’s shift toward lower emissions solutions.