Oil & Gas Industry Outlook for

Geran Penyelidikan dan Pengkomersialan Vendor

(GPPV) by Ministry of Entrepreneurship Development

and Cooperatives (MEDAC)

June 2020

CONFIDENTIAL 2

Oil & Gas Services and Equipment (OGSE) industry covers the entire

Oil & Gas value chain from upstream to downstream activities

2

Global players in Malaysia’s oil and gas

industry

Pipeline

solution

s

Downstream plant

turnaround & MRO

Engineering

DesignFPSOs

USD16 billion1Top 100 companies’ revenue USD28 billion1

Top 100 companies’ fixed assets

Source: 1 MPRC’s OGSE100 FY2018 publication

CONFIDENTIAL 3

Malaysia’s oil and gas landscape is well-developed supported by various

stakeholders including Government Agencies and Ministries

3

Key stakeholders

Specialist

Consultants,

Vendors, Agents

Sub-

Contractors

Main(Umbrella)

Contractors

Operators

(32)

Regulat

or

2,878 active PETRONAS-licensed services

companies

Registration, licensing, SWEC, VDP, VDPx, LESTARI programmes

MEDAC KWP MOHR MITI MOF MOHE

CONFIDENTIAL 4

Importance of OGSE industry to Malaysia’s economy

4

Supported the contribution of 13.8%

GDP for the Oil, Gas and Energy sector.1

More than 59,000 total

headcounts (high skilled talents) in

the OGSE industry2 e.g. Engineering and

Geology.

4,414 PETRONAS Standardised Work

and Equipment Categories (“SWECs”)

licensees including non-Oil & Gas centric

businesses.3

RM67.4b OGSE revenue in FY2018

from a population of 1,641 OGSE

companies comprising of OGSE100, 165

non-OGSE100 Mid Tier and 1,376 SMEs.4

44 51 52

59 56 62

56 56 55

13

15 18

17

10 9

7 5 6 7

8 7

6

7 7

6 6 6

-

10

20

30

40

50

60

70

80

90

2010 2011 2012 2013 2014 2015 2016 2017 2018

RM

Bill

ion

OGSE INDUSTRY REVENUE 4

OGSE100 Non-OGSE100: Mid-Tier SME

Source:

1. DOSM annual publication

2. Malaysia OGSE Talent Landscape 2018, published in PETRONAS Activity Outlook 2019

3. PETRONAS

4. MPRC’s OGSE100 Financial Year 2018 publication

CONFIDENTIAL 5

The growth and the development of the OGSE sector are largely dependent

upon the activity level of O&G industry and hence are oil price sensitive

Brent Crude oil Prices (USD/bbl)

6.6

5.5

8.0

3.7

6.16.2

8.3

8.3

0.0 0.01

-2.14% PBT Margin of OGSE sector in Malaysia (2008-2018)

CONFIDENTIAL 6

The oil and gas sector especially OGSE were still reeling from the

2014/2015 oil price crisis as evident from FY2018 results

Source:

1. MPRC’s OGSE100 Financial Year 2018 publication

2. SSM’s data

1. Total revenue decline by 1% 2. Loss Before Tax of RM1.4 billion

3. TFA decline by 5.1% 4. Lower against regional counterparts

CONFIDENTIAL 7

Industries are heavily impacted due to low oil price environment coupled with global pandemic. Way of working has changed tremendously

Source: PETRONAS presentation to MDBC on 3rd June 2020

Immediate term technology Medium to long term technology

Automation

Digital Fields

Brownfield

Management

Flow Assurance

Drilling

Facilities

Digital Platform

Wells P&A

Deepwater

Co2 Sequestration

CONFIDENTIAL 8

With the current situation, immediate term technology that are efficient and effective to reduce cost is highly sought (1/2)

Source: PETRONAS presentation to MDBC on 3rd June 2020

Automation

Remote operation

Inspection & maintenance

Digital Fields

Data driven maintenance

Brownfield

Management

Sand mgmt.

(avg. 10-45

microns)

Flow Assurance

Wax / paraffin Slugging

Water mgmt.Containment

mgmt.

Production

Enhancement

BrownfieldsHydrates

Near field

CONFIDENTIAL 9

With the current situation, immediate term technology that are efficient and effective to reduce cost is highly sought (2/2)

Source: PETRONAS presentation to MDBC on 3rd June 2020

Drilling

Casing while Drilling

(CWD) for deepwater

subsea

Coiled Tubing

Drilling (CTD) for

marginal reserves

Facilities

Low cost terminal

Facilities/system

decomplexing

Digital

Platform

Integrated, robust

and agile platform

Wells P&A

New tools and

techniques:

• Perf Wash Cement

(PWC)

• Perf tools for

multiple casing

strings

Deepwater CO2

Sequestration

Capture

Transport

StorageLow cost well for

marginal fields

THANK YOU

Malaysia Petroleum Resources Corporation

Suite 20-11, G-Tower,

199 Jalan Tun Razak,

50400 Kuala Lumpur,

Malaysia

Tel: +603 2858 8555

Fax: +603 2858 8599

For more information, visit us at www.mprc.gov.my