Malaysia on target to become regional oil and gas hub

Malaysia on target to become regional oil and gas hub

Malaysia is set to become the oil and gas hub by year 2020 and is well on
target towards becoming a regional hub within three years.

Malaysian Petroleum Resources Corporation (MPRC) said the country, deemed as
one of the fastest growing economies in the Asia Pacific region and home to
market-oriented economy and pro-business government policies, is also aims
to ensure its local players to become regional players in the sector.

MPRC chief executive officer Datuk Shahrol Halmi said it is important to
have Malaysia's reputation at play to become a hub, and not just beating the
drum claiming to be one.

"We also have strategies to ensure that we get there, and working hard to
make sure it happens.

"It is crucial to attract the multinational companies (MNCs) to come to
Malaysia and ensure that they make Malaysia as a regional base for the
region.

"A hub is not just a hub. It brings other benefits to the Malaysian economy
such as technology transfers, job opportunities and high-paying jobs as
well," Shahrol said in an exclusive interview with NST Business recently.

He said out of 50 MNCs in the globe currently, 18 MNCs have already set up
their regional operational headquarters in Malaysia.

"An operational headquarters is important as the scale is bigger compared to
having a com setting up just departments such as finance or human resources.

"We are on target, in terms of reputation building, attracting MNCs to set
up operational HQs and our players becoming regional players.

"Our stretched target is to have at least half of the global players to have
operational HQs in Malaysia," he said.

Malaysia aims to grow its aggregate production capacity for oil, gas and
energy by five per cent per annum between 2010 to 2020.

Most of this growth will come from enhancing the output of its O&G fields as
well as new marginal fields while enhance exploration and development of
deepwater areas.

The dynamic relationship between the country's public and private sectors
has also developed a strong O&G ecosystem that is supported by an
investor-friendly legislative and regulatory framework and well-developed
infrastructure.

Speaking on the country's wants and needs as well as the challenges faced by
the local players, senior vice-president Syed Azlan Syed Ibrahim said MPRC
also wants to elevate the local players to become regional or global
players.

This, he said, is part of the definition to becoming a hub for Malaysia.

"Cost structure is exceptionally important now for O&G companies while
adjusting to the new norm. Cost structure is the name of the game, if I may
say so.

"What we realise is, when companies decide on the location of the
operational headquarters, it important to have close proximity to their
client, good living standards and availability of talent.

'We are proud that we have all three in the country to offer these MNCs to
come here. Incentives are usually just the sweetener to the deal," he said.

He said the challenge lies mostly in pushing local players to become
regional players, and added that local players are not all fully-independent
and need to have their own value -proposition or technology.

"We believe the market is mature enough for our players to develop their own
technology, products or services. We are currently in the transition phase
from being an agent of other company's technology to coming up with our
own," he added.

There are about 3,956 O&G services and equipment (OGSE) businesses in
Malaysia comprising international oil companies, independents, services and
manufacturing companies that support the needs of the value chain both
domestically and regionally.

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Link to Original Article:
https://www.nst.com.my/business/2017/09/278457/malaysia-target-become-region
al-oil-and-gas-hub-mprc

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com