With signs of greater market volatility in 2019, Malaysian oil and gas services and equipment (OGSE) companies must not lose sight of the need to become more diversified to remain competitive.
Whilst oil prices have risen since the beginning of the year, concerns about a supply glut and weakness in the global economy will keep prices on a tight leash, as evident from the general cautiousness of global oil companies and their continuous push for cost efficiencies. “Even as the industry is seeing a gradual recovery in activities, the oil price uncertainty is a clear reminder to OGSE players to stay focused and become more competitive,” Malaysia Petroleum Resources Corporation deputy chief executive officer Mohd Yazid Ja’afar said.
“Companies that turn to innovation, hone niche technologies to gain economic advantages, employ and retain skilled talent, and embrace diversification in particular to the downstream segment are in a better position to undertake new growth ventures in Malaysia and beyond,” Yazid added.
The companies’ ability to navigate the uncertainties is also reflected in the latest MPRC100, a list of Top 100 OGES companies in Malaysia that are ranked based on their annual revenues.
MISC Bhd topped the FY2017 ranking, edging last year’s top-ranked company, Sapura Energy Bhd to second place while Dialog Group Bhd maintained its spot at no. 3.
The list also saw several rank climbers compared to the previous edition. This includes Nam Cheong Dockyard Sdn. Bhd., ranked 29 (up from 55th
spot in FY2016), Yokogawa Kontrol (Malaysia) Sdn. Bhd., at no. 31 (from no. 57) and T7 Global Bhd., at no. 47 (from no. 98), among others.
Joining the FY2017 top100 ranking for the first time include Chiyoda Malaysia Sdn. Bhd., Ice Petroleum Engineering Sdn. Bhd., and Helios Petroleum Sdn. Bhd., due to higher turnover.
“The annual MPRC100 initiative is part of MPRC’s commitment to advance information transparency in the OGSE sector,” Yazid said, adding that the list also allows for OGSE companies to gain clarity on their performance against their industry peers.
Analysis from MPRC100FY17 showed that the overall Malaysian OGSE sector recorded a total revenue of RM68.1 billion against FY16’s RM68.8 billion, a marginal drop of 1.1%. Profit before tax (PBT) of the MPRC100 companies also registered a decline at RM9.4 million, largely due to asset impairment charges undertaken by asset-heavy companies.
The FY2017 findings also demonstrated that Malaysian OGSE companies fared better than their regional counterparts due to ongoing domestic activities in the upstream and downstream segments. In a 2017 comparison with the top 20 OGSE companies in Southeast Asia, Malaysian OGSE firms registered an average revenue growth of 12% while other regional players showed an average revenue decline of 14%.
Moving forward, MPRC will continue to work with all relevant government agencies and stakeholders, PETRONAS, industry trade associations and OGSE firms to spearhead economic growth and nurture long-term resilience among Malaysian OGSE players.