by BERNAMA / pic by AFP
MALAYSIA’S oil and gas services and equipment (OGSE) industry has seen green shoots of recovery since the financial year 2019 (FY19), owing to a modest pickup in project activities and fewer impairments.
According to industry development agency Malaysia Petroleum Resources Corp (MPRC), OGSE companies recorded large impairments two years ago.
However, it said, financial data on the top 100 privately held and public-listed OGSE companies in Malaysia saw losses tapering off in 2019 amid a pickup in activities.
“A preview of the top 100 OGSE (OGSE100) companies showed that the sector swung back into the black with a pretax profit of RM612.45 million in FY19 from a loss of RM1.87 billion registered in the previous year,” it said in a statement yesterday.
OGSE100 analyses the financial performances of both public-listed and private companies to provide a wholesome “state of the industry” assessment to industry, policymakers and financial institutions.
Moving forward, MPRC president and CEO Mohd Yazid Ja’afar said OGSE players will have to re-evaluate their playbooks and resilience in navigating the years ahead following the sharp drop in global oil demand due to the Covid-19 pandemic, coupled with the oversupply of the commodity.
“Industry players will also need to evolve in ways which contribute to efforts in digitising the supply chain, as well as reducing their carbon footprint,” he said.
Mohd Yazid noted that globally, there is a gradual but consistent shift in policies to support the energy transition, encouraging the use of technology and renewable fuels.
At the same time, he said investors and sovereign funds have also joined the calls for decarbonisation efforts.
“Investors will be taking a harder look at the environmental impact of the O&G services and production through environmental, social and governance-focused investing as the future energy mix takes shape,” he said.