PENAMPANG: Sabah oil and gas companies secured RM2 billion worth of work contracts in 2024, a three-fold increase that reflects growing confidence in local capabilities.
This means more jobs and money in the industry now stay in Sabah, instead of benefitting outside companies.
“We scored RM2 billion last year and we hope that it is going to be more this year,” State Finance Minister Datuk Seri Masidi Manjun said in his keynote at the Oil and Gas Business Opportunities Forum held at the ITCC Grand Ballroom, Saturday.
He also said those who compare Sabah’s progress in the industry with Sarawak must bear in mind that the latter has 115 years more experience.
“Sabah and Sarawak are not an apples-to-apples comparison. Oil was discovered in Miri in 1910, so Sarawak is 115 years ahead of us. But we are running faster to catch up with Sarawak.”
“When our mind is focused on what needs to be done, things can get done quite well,” he said, adding credit is owed to the Commercial Collaboration Agreement (CCA), signed with national oil company Petronas in December 2021.
The turnaround began when Sabah created its own oil and gas company, SMJ Energy, three years ago.
Starting with just RM50 million from the State Government and 11 workers, the company now employs 30 people and made RM362 million profit last year.
“We started very, very skeletal. But within three years the company is now worth RM5 billion in assets,” said Masidi, who is also SMJ Energy Chairman.
The key was keeping costs low while focusing on making money. Instead of hiring lots of expensive managers, SMJ Energy outsources specific jobs and only pays when work is completed.
A big reason for the success is the Sabah Local Content Council, led by SMJ Energy’s OGSE and Corporate Executive Director Terry Biusing.
This group makes sure more contracts go to Sabah-based companies.
“We have a local content council chaired by Terry and for the last one year there has been a notable increase in the volume of contracts secured by local companies.”
He acknowledged that local companies sometimes lack the technical skills for complex jobs.
The State encourages them to partner with experienced international firms whereby the foreign company provides expertise while locals do the hands-on work and learn new skills.
Masidi noted that Petronas has also agreed to take in Sabahans as interns, giving them valuable experience in oil and gas operations.
The Business Opportunities and Challenges in Sabah’s Oil and Gas Industry Forum: The Way Forward was hosted by the Kadazandusun Chamber of Commerce and Industry (KCCI) and Dayak Chamber of Commerce and Industry (DCCI) in conjunction with the Kaamatan Gawai celebration.
The forum brought together business people from Sabah and Sarawak to share ideas and explore partnerships.
