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Over 70pc Sabahan oil and gas services and equipment companies inactive, says state finance minister

Publish date: Sat, 18 May 2024, 09:00 AM

KOTA KINABALU, May 18 — Over 70 per cent of Sabahan oil and gas services and equipment (OGSE) companies remain inactive since 2022, said Sabah Finance Minister Datuk Seri Masidi Manjun.

Masidi said the figure is disappointing, especially considering the number of Sabahan OGSE companies has grown by 81 per cent to 475 companies since the same year.

He was made to understand that part of the reason for the distressing lack of participation is because the capacity or ability of local companies in taking part in tender processes which require certain skills are not up to par.

He opined that it could also be due to local companies still used to being spoon-fed with opportunities, causing them to be complacent and not strive to better their performance to be at the same level as bigger companies.

“Obviously something is not right. We have a lot of Sabahan OGSE companies but the ones that are actually active are not that many.

“I am not sure whether they are inactive because of lacklustre capacity, lack of opportunities or disinterest in the industry, but I would like to advise against setting up a company and relying solely on luck as we need to put in effort to elevate to be able to compete in the Oil and Gas (OnG) industry.

“I don’t know whether the industry is difficult — and hopefully I’m wrong — but we’re still used to being spoonfed with opportunities. Times have changed and we need to strive to compete with the rest of the world, and this should start with us,” he said.

Masidi, who is also Karanaan assemblyman, told reporters this after launching the Sabah Local Content Council (SLCC) for the OGSE industry at Hilton Kota Kinabalu Hotel here yesterday.

He said this council, which was established to find a way to increase local companies’ participation in the OGSE sector and to monitor the progress, will be conducting a study on why many Sabahan OGSE companies remain inactive, adding that the Sabah Ministry of Industrial Development and Entrepreneurship will also pursue a similar endeavour.

He said another area of focus for this council is to oversee the commitment of big OnG players such as Petronas in helping or providing opportunities to Sabahan companies.

“Last year, only RM1.5 billion worth of OGSCE work was awarded to our local companies. This is not a big amount when compared to the total worth of work awarded in Sabah, but what is interesting is that almost half of the contracts were procured by Sabahan companies operating outside the state, as it means that our local companies are actually capable of competing with companies outside of Sabah.

“So I had discussed with Petronas recently, and I suggested for big OnG companies that procured contracts in Sabah to give space to local companies which might not have the capacity to compete with bigger companies by creating a mentor-mentee programme.

“With such a programme, these big companies that obtained contracts here can ‘adopt’ a local company for the works and act as a mentor to educate them to scale to greater heights. Petronas has agreed with this proposal, and I hope that it can be implemented and monitored by the SLCC,” he said. — The Borneo Post

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