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Labuan hopeful as oil prices rebound: MP
Published on: Wednesday, May 23, 2018

Labuan: Several oil rigs around the island which had been "jobless" for months have been reactivated to resume operations, signalling a possible return of good times for the island languishing in the doldrums for two over years.

Chairman of Labuan Corporation Datuk Rozman Isli said after attending a meeting of the Board of Asian Supply Base Monday:" I am told that at least three such oil rigs are returning to action following the rebound in world crude oil prices which had been tumbling for months at one point in January 2016 to US$30.

Crude oil prices quoted this week stood at US$72.50 depending on grade which is at touching distance with its peak price of above US$100.

In 2015, 13 oil rigs were stacked here as a causality of the downtrend in crude price and this includes six waiting to be scrapped or cold stacked.

Rozman noted: "When oil rigs return to business they serve as good indicator of the strength of the oil and gas industry. When rigs began to operate, supply boats begin to be busy and there will be more movement of goods and demand for logistic support services which will gradually lead to all sectors benefiting from a reborn industry.

"Labuan is a largely oil and gas based economy and it is the hope of everyone that the burst bubble would be back to its originals shape."

When price of crude began to plunge few years ago, big-time service providers such as Schlumberger, Baker Huges downsized operations and reduced staff. Labuan was not spared and some 10,000 were shown the door.

Based on the figures of the National Statistics Department, the unemployment rate in Labuan stood at 7.8 per cent or 7, 800 based on the local population of 100,000. Petronas Carigali Sdn Bhd moved its operations from here to its own base in Bintulu, adding to the woes of the island.

Not only jobs were loss, according to chambers of commerce but the volume of local business dropped by 40 per cent with warehouses becoming empty, residential houses reducing rents to attract tenants and investors deterred in starting projects.

However, on a final note, Rozman said: "It may be too early to celebrate given the unpredictability of oil price trends." - Sohan Das

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