KUALA LUMPUR, 26 FEBRUARY 2024 – Malaysia’s oil & gas services and equipment (OGSE) companies recorded a 7% year-on-year growth in revenue to RM72.7 billion in the fiscal year 2022 (FY2022), driven by higher contracting rates and asset utilisation amid the award of new contracts.

In its FY2022 edition of the OGSE100 publication released today, Malaysia Petroleum Resources Corporation (MPRC) said 73.5% of the industry revenue was contributed by the country’s top 100 OGSE companies by revenue. Non-OGSE100 mid-tier companies (MTCs) and small and medium-sized enterprises (SMEs) accounted for 13.8% and 12.7%, respectively.

The report also said the OGSE industry total population stood at 2,286 companies in 2022, made up of the OGSE100, 1,945 non-OGSE100 SMEs and 241 non-OGSE100 MTCs. Meanwhile, of the 241 MTCs, 12 had grown from SMEs in the previous year whereas 23 had reverted to SME status.

“Our analysis of the OGSE industry and 100 top OGSE companies by revenue for FY2022 showed the fragility of the recovery achieved in 2022. This can be seen with a contraction in the industry’s profitability in FY2022 compared with the previous year, despite growth in revenue,” said Mohd Yazid Ja’afar, President/CEO, MPRC.

According to the OGSE100 FY2022 report, the OGSE industry registered pre-tax losses of RM3.5 billion against profit before tax (PBT) of RM4.2 billion a year earlier mainly due to RM5.2 billion in impairment losses from a number of public-listed companies within the OGSE100. Excluding the impairments, the industry would have registered PBT of RM1.7 billion, of which the OGSE100 accounted for RM974.4 million. In FY2021, the industry had recorded PBT of RM4.2 billion.

Nonetheless, Yazid expressed optimism on the OGSE industry going forward, based on the latest outlook from PETRONAS. According to the PETRONAS Activity Outlook 2024-2026, Malaysia is forecast to see stable activity for drilling rigs, fixed structures, installation and projects, whereas commitments by Malaysia Petroleum Management will also drive plug and abandon activities. Additionally, downstream opportunities remain in Pengerang and Sarawak, where plant turnaround work will be required.

“These projects represent vast opportunities for local OGSE players equipped with the right tools and expertise to capitalise on for the next three years,” he said.

He also reiterated the need for OGSE companies to pivot towards sustainability, as OGSE companies must increasingly comply with requirements from sustainable practices by customers, regulators, investors and financial institutions. To this end, Yazid highlighted MPRC’s development of the three-part national OGSE sustainability programme, which commenced with the National OGSE Sustainability (NOS) Plans in 2022. This year, MPRC will introduce the NOS- Roadmap, creating pathways for OGSE companies to adopt and respond to sustainability requirements, before the NOS-Framework is subsequently launched by 2025.

About OGSE100
The OGSE100 publication provides information on consolidated industry performance of revenue, PBT, PBT margin and total non-current assets for OGSE) companies registered in Malaysia. The companies are then ranked according to the top 100 by revenue. The purpose of OGSE100 is to show the size and performance of OGSE companies and serve as a reference point for industry players, potential investors and relevant stakeholders. The publication also contains forward-looking statements based on assumptions, information and various perspectives provided to MPRC to give a holistic picture of the industry.

About MPRC
Established in April 2011, Malaysia Petroleum Resources Corporation (MPRC) is an agency of the Ministry of Economy primarily tasked with advancing Malaysia’s Oil and Gas Services and Equipment (OGSE) industry. As countries around the world, including Malaysia, embark on the energy transition, MPRC further advocates for OGSE companies to pivot towards cleaner and sustainable energy as new areas for business growth. MPRC also provides policy recommendations to the Government on the oil & gas and energy industries.

Following the launch of the National OGSE Industry Blueprint (OGSE Blueprint) 2021-2030, MPRC serves as its custodian, coordinating and implementing its initiatives together with OGSE Blueprint partners. The OGSE Blueprint seeks to develop a robust, resilient, and globally competitive OGSE sector that contributes to sustainable national development in Malaysia.