17-02-04 Several oil and gas industry players have formed a trade body to help them penetrate or enhance their presence in the overseas market where the national oil company Petronas operates or bids for projects, sources say. Sources tell that the newly formed Malaysian International Oil and Gas Services Council will promote the Malaysian companies’ expertise and services overseas and help to keep the local firms informed of jobs available.
"Petronas has been notified of the setting up of the council. We have sought the national oil company’s cooperation in promoting the Malaysian companies’ expertise in the countries that Petronas operates or when it bids for new projects," an industry player says. "It is a common practice among multinational companies to bring along their suppliers, vendors and contractors to bid for foreign contracts and we are seeking Petronas’ cooperation on this matter," he points out.

A source says Petronas, which operates or has business interests in 30 countries, has agreedto inform the council on the jobs, supplies, services and expertise required. It is learnt that the Registrar of Societies (ROS) has approved the oil and gas companies’ application to form the council. It is scheduled to hold its first annual general meeting by April.
"Until now, we do not have a body to promote the capabilities of the Malaysian oil and gas industry unlike the manufacturers who are grouped under the Federation of Malaysian Manufacturers. Some of the local oil and gas players, despite their small size and financial capabilities, have developed a high level of expertise in their fields," he says.

Among the members in the council are MMC Oil & Gas Engineering, Petra Perdana and KNM Group. There are more than 100 local companies involved in both the upstream and downstream oil and gas industries and they include yard fabricators, piping, suppliers, vendors, drilling contracts and systems, and IT specialists.
Several listed Malaysian companies including UMW Holdings, Scomi Group and Petra Perdana were acquiring foreign and local specialised oil and gas related companies in anticipation of the higher exploration and production activities in the region given the high crude prices since early 2002.

Last year, Scomi acquired the distributorship rights to an environmentally friendly, palm kernel ester-based drilling fluid used in the oil and gas exploration, which will boost annual revenue by 10 % from this year onwards. The firm also acquired a Singapore-based drilling waste management specialist OilTools International.
UMW has gone into a joint venture in China to manufacture steel pipes and pipe anti-corrosion coating and insulation. In the local market, analysts believe that there could be between RM 38 bn and RM 50 bn of new contracts up for grabs in the next five years, of which exploration and production contracts are anticipated at RM 20.2 bn and pipelines at RM 18.6 bn.

The government last year announced that a second consortium would be set up to boost the exploration of marginal oil fields in the country.
However, a number of companies in anticipation of fewer jobs in the country have set their eyes on the overseas market, including Vietnam and several countries in Africa.