Petronas urges O&G players to react carefully
Published on: Wednesday, September 26, 2018
Kuala Lumpur: National hydrocarbon custodian, Petronas, is urging all players in the oil and gas (O&G) industry to tread carefully and respond cautiously to the unpredictable business landscape.President and Group Chief Executive Officer Tan Sri Wan Zulkiflee Wan Ariffin said although the industry had seen an encouraging improvement – with year-to-date Brent crude price average rising sharply to US$74 per barrel from US$54 per barrel in 2017, increased investment and higher number of rig counts, volatility in the industry was expected to continue given the prevailing external factors such as trade war and other geopolitical risks."The business models adopted have to be robust to go through price cycles which are inherent in our industry," he said in his keynote address at the Fourth Malaysia O&G Services Exhibition and Conference (MOGSEC) here Tuesday.
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Apart from these factors, he said the industry was also facing multiple disruptions including new technologies, data-enhanced products, innovative competitors and redefined customers experienced that are changing the way business is being done.Additionally, he said renewed commitments towards the environment was accelerating the transition to new consumer behaviours as apparent in the transportation sector where global growth in electric vehicles is fast increasing.He said all these changes and disruptions would have a significant impact on the O&G industry and were creating a highly dynamic and competitive field for all players including O&G services providers."Those who have a better chance of staying in the game are the ones that are agile and can innovate, besides having the ability to capture new frontiers of value," he added.
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He said the industry was also expected to experience rates of digital disruption that would reshape and redefine common operating procedures with new technologies underpinning various processes."These sources of disruption require companies to not only rethink their operating models but also their talent and organisational culture," he said.
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More talents are needed among vendors who are skilled and adaptable to navigate through these changes."Furthermore, increasing focus on economies of scale and integrated solutions, owning technologies and having export capabilities can propel local O&G services companies to greater success," he said.On the part played by Petronas, he said the company had awarded close to RM9 billion worth of cumulative contract value to 99 vendors under the Vendor Development Programme, established since 1993 to nurture local vendors in the O&G services sector.He said these were among various initiatives undertaken by Petronas to grow Malaysia as a regional hub of distinctive capabilities and expertise through capability-building incentives, technology-focused solutions and financing initiatives.Stay up-to-date by following Daily Express’s Telegram channel.
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