In the event of a prolonged low oil price environment; analysts are favourable towards oil and gas players that are involved in maintenance, construction and modification (MCM) services like Sapura Energy Bhd which has wide experience in that field.

MIDF Research in its latest note said oil majors are expected to cut or delay some portion of their planned capital expenditures (capex) for 2020 which in turn, could potentially result in delayed contract awards for oil and gas service providers.

The sharp plunge in global oil price definitely hit upstream exploration and production (E&P) players the most given that oil productions are directly correlated to the oil price.

The Brent oil price is currently hovering at US$30 to US$35 per barrel.

MIDF said Malaysia is an oil exporting nation and revenue from oil-related income constitutes 30.9% of the total government revenue in 2019. To ensure stable revenue and cash flow, oil production must be sustained.

Hence, it said MCM services will be carried out regardless of the oil price environment and Petronas is expected to remain committed to its maintenance spending in 2020.