KUALA LUMPUR: With the current temporary rise in the crude oil prices - strengthening since the start of 2018, it will be unlikely for the prices to revert to the heady days of USD$100 per barrel, evident from the cautious response of global oil companies.
As such, Malaysian Petroleum Resources Corporation (MPRC) chief executive officer Datuk Shahrol Halmi said Malaysia oil and gas services and equipment (OGSE) companies should not slow their momentum or lose focus on raising their competitiveness.
"To be more competitive, local OGSE companies should focus on providing economies of scale and integrated solutions,own technologies, employ quality talent, and possess export capabilities," he said in media briefing recently.
The media briefing was held to share the latest MPRC100 rankings and industry analysis for the financial year ended 2016.
In the latest MPRC100 ranking, Sapura Energy Bhd regained the top spot of the top 100 oil and gas services and equipment companies in Malaysia.
MISC Bhd eased to the second spot while Dialog Bhd held onto the third place.
The list also saw new debuts such as Onesubsea Malaysia Systrems Sdn Bhd, Cekap Technical Services Sdn Bhd and E&P O&M Services Sdn Bhd.
Shahrol said the MPRC100 initiative is part of the agency’s effort to track the Malaysian OGSE sector’s performance and increase transparency for potential investors, financial institutions and stakeholders.
The list also provides an opportunity for OGSE industry players to gain clarity on their positions against peers in the industry, added Shahrol.
“The FY2016 findings provide useful insights onhow Malaysian OGSE companies performed as the global oil and gas industry, especially in the upstream, adjusted to a very steep correction in oil prices since late 2014,” he added.
MPRC data showed overall revenue for the OGSE sector fell 10.0 per cent to RM66.6 billion while total OGSE profit before tax declined significantly to RM146 million in FY2016 compared with RM5.3 billion in 2015.
The decline was largely due to asset impairment charges by capital-intensive players, said MPRC’s senior vice president for Industry Development Syed Azlan Syed Ibrahim.
With companies such as Sapura Energy, Bumi Armada and UMW Oil & Gas impairing their floaters, drilling rigs, marine vessels and exploration & production assets, total impairment charges recorded by MPRC100 companies during the year amounted to RM5 billion.
Syed Azlan also pointed out that Malaysian players demonstrated greater resilience compared to international counterparts in the Bloomberg Top 100 OGSE companies ranked by revenue.
“Specifically, MPRC100 companies’ emdian PBT margin was significantly higher at 3.4 per cent compared to Bloomberg’s Top 100 median PBT of -6.8 per cent.
“This was because domestic jobs continued to be available and Malaysian players are relatively diversified across the breadth of the supply chain.
“Going into 2017, the performance of listed players between Q1 and Q3 2017 as well as new project announcements point to prospects of a gradual recovery. We also saw OGSE companies diversifying towards downstream opportunities due to Petronas’ focus on this segment,” he added.