Towards stable, sustainable oil and gas sector

Daily Express

5 days ago

Published on: Saturday, July 12, 2025
Published on: Sat, Jul 12, 2025
By: Sherell Jeffrey Text Size: Terry said in December 2021, the State Government inked the Commercial Collaboration Agreement (CCA) with Petronas which opened doors for Sabah companies to get a bigger slice of the pie in an industry that produces 40 per cent of Malaysia's oil and 20 per cent of its gas,'. PENAMPANG: The State Government has a dream to create a stable, sustainable oil and gas industry where Sabah companies can really participate, said SMJ Energy Sdn Bhd's Oil and Gas Services and Equipment (OGSE) and Corporate Executive Director Terry Biusing. He said this at the recent Kadazandusun Chamber of Commerce and Industry (KCCI) – Dayak Chamber of Commerce and Industry (DCCI) Oil and Gas Business Opportunities Forum at the ITCC Grand Ballroom, recently. Terry said in December 2021, the State Government inked the Commercial Collaboration Agreement (CCA) with Petronas which opened doors for Sabah companies to get a bigger slice of the pie in an industry that produces 40 per cent of Malaysia's oil and 20 per cent of its gas,'. The numbers speak for themselves. Since the agreement kicked in, Sabahan companies have seen their earnings shoot up by 300 per cent from 2021 to 2024. More recently, comparing May 2024 to May 2025, there was a 96 per cent jump in contracts awarded to Sabah companies, reaching RM603 million more than what they earned in the entire year of 2021. 'In just the first five months of 2025 compared to the same period in 2024, we have nearly doubled the revenue awarded to Sabahan companies,' Terry said, citing how the effort keeps getting better. The industry has also grown in size. The number of oil and gas service companies jumped 51 per cent from 263 to 396, while active companies nearly doubled from 79 to 151. This is not just about numbers, it means real jobs and real opportunities for Sabahans. How did they pull this off? Through smart policy changes made by a special committee led by local leaders. Their job was to increase Sabahan participation without compromising on safety, quality or costs. The key changes included raising the tender threshold to RM20 million for upstream work and RM10 million for downstream work. They also expanded the types of work reserved for Sabahan companies from 63 categories to 135, more than doubling the opportunities. 'What does prioritised mean for Sabah tenders? It means if there are more than three capable Sabahan companies bidding, it becomes a closed tender for Sabahan companies only,' Terry said. He said non-Sabahan companies must partner with local firms, with Sabahan companies required to hold at least 30 per cent ownership or do 30 per cent of the work. Perhaps the biggest game-changer was introducing the Kinabalu Activity Outlook (KAO), which brought transparency to an industry that was previously like a guessing game. 'In the past, companies applying for Petronas licenses were like buying lottery tickets. You never knew which numbers would come up or which licenses would be used. That is where the KAO comes in,' he said. Terry said the KAO gives companies a three-year forecast of opportunities across different sectors, covering all major operators including Petronas, Shell, Hibiscus and ConocoPhillips, among others. 'The current outlook shows 90 per cent of tenders are prioritised for Sabahan companies, with clear categories, namely 23 per cent have low entry barriers, 45 per cent need medium investment and 31 per cent require high investment or special technology,' he said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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