MPRC Calls On OGSE Players To Consider Strategic Partnerships

By Siti Radziah Hamzah

KUALA LUMPUR, March 18 (Bernama) -- Malaysia's oil and gas services and equipment (OGSE) companies have been urged to consider strategic partnerships to be more competitive and get more energy transition opportunities beyond the industry.  

Malaysia Petroleum Resources Corporation (MPRC) senior vice president/operations head Mustafa Akbar Reza noted that the OGSE  industry consolidation has been repositioned to focus on strategic partnerships.

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"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 told Bernama in an interview ahead of the launch of the Mid-Term Review of the National OGSE Industry Blueprint 2021-2030 (OGSE Blueprint) report on March 20.

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, there were 3,392 OGSE companies under the Standardised Work and Equipment Categories (SWEC) licensed and registered by Petronas.

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Mustafa noted that strategic partnerships would help OGSE companies diversify and compete better, especially outside Malaysia, which can also help them diversify their customer base.    

He said the MPRC is committed to driving the OGSE companies' strategic partnerships forward and that the agency is looking for a series of programmes to enhance the competitiveness and resilience of OGSE companies to drive strategic partnerships within the industry.  "More details will be shared during the OGSE mid-term review launch," he added. 

Mustafa said the MPRC also is planning to introduce another key component of strategic partnerships on March 20 that may include the signing of memoranda of understanding or formal agreements between one or two partners and pointed out that technology adoption was historically an area where OGSE companies lagged. 

"We have just seen our effort to boost technology adoption pick up pace since last year," he said, adding that there would be an announcement of new developments under the OGSE Development Grant to support technology adoption.

Since the launch in 2021, RM20 million has been allocated through the OGSE development grant, benefitting 64 companies, with 22 companies successfully commercialised and generating a combined revenue of RM38.3 million

Mustafa noted that the OGSE development grant has not gotten enough representatives from Sabah and Sarawak and that the MPRC would work together with stakeholders in both states to address the issue. 

Explaining the mid-term review report, Mustafa said the report was conducted by MPRC to evaluate progress and ensure the industry remains aligned with national priorities and successfully adapts to the evolving energy landscape. 

In general, Mustafa said the majority of OGSE companies are small and medium enterprises, so the impact of the OGSE Blueprint, especially concerning their most pressing “pain points”, such as upskilling talent, technology adoption and access to finance, benefits the SMEs.  "The OGSE Blueprint is a long-term document, involving all the OGSE ecosystem stakeholders, as with any undertaking of this size, one challenge is ensuring everyone remains committed to working together until the finish line," he added. 

Among key milestones achieved since the OGSE Blueprint launch were bridging the talent gap and addressing the industry’s need for a one-stop source of information on support and services available for OGSE companies.

On talent development, Mustafa said around 600 individuals were trained under the coaching and mentorship programmes, enhancing OGSE industry knowledge and expertise, and more than 300 upskilled and certified in highly sought after technical disciplines. 

He added that the launch of the i-OGSE portal in 2023, which provided information on areas including financing and export programmes has channelled grants, alternative financing and export assistance to more than 60 companies.

Mustafa said eight new or expansion projects have been approved by MIDA, attracting multinational investments and 160 companies and recording a total of RM2 billion in potential export sales via MATRADE-led business matching and global trade fairs. 

Since 2021, Mustafa said some OGSE companies are gradually shifting to new adjacent sectors in the energy transition, with companies venturing into solar and other renewable energy.  "This marks a major milestone in the evolution of the OGSE sector, where we see companies pivoting to new businesses, in line with the oil and gas industry’s shift towards providing lower emissions solutions," he added.

-- BERNAMA