The Malaysian Investment Development Authority (MIDA) is optimistic of the outlook for the oil and gas (O&G) sector, especially for downstream activities.
“We have seen the downturn.. Based on the market indication and the stabilisation of oil prices now, we think there will be more prospects in the industry,” Deputy Chief Executive Officer (CEO) Datuk N. Rajendran told reporters after presenting the Malaysia Book of Records certificate to Upstream Downstream Process & Services Sdn Bhd (UDPS).
The company was recognised by Malaysia Book of Records as the first Malaysian oil and gas company to obtain the MS 1000:2014 Shariah-based quality management system.
Last year, MIDA approved 13 O&G manufacturing projects, worth RM203.7 million, and facilitated three services projects, valued at RM3.7 billion, as well as, three Domestic Investment Strategic Fund projects worth RM84.3 million.
“If the oil price continues to consolidate, certainly we will see more upstream services activities.
“However, for downstream activities, it will continue the strong trend and we believe Malaysian companies, which support both activities, would have better opportunities,” Rajendran added.
Meanwhile, UDPS CEO and Managing Director Ahmad Komarolaili Abu felt O&G industry players must grab opportunities offered by downstream activities.
“Malaysia has been doing some revolution in O&G sector. In the past 15 years, we have been focusing much in the upstream sector.
“But given declining oil prices, upstream activities might not be as lucrative. Therefore, we are transforming from upstream to downstream activities,” he said.
For instance, he said downstream projects in Pengerang, Johor, have doubled refinery production capacity to 1 million barrels a day and tripled its pertrochemical production to 1.5 million barrels a day.
“If players are not prepared from now, they might not be viable in terms of technical and competitiveness in the next two years.
“That’s why it is quite important for companies to look into these opportunities,” he added.