Kota Kinabalu: The Sabah Government has set a target to increase local participation in oil and gas service and equipment (OGSE) contracts to at least 60 per cent by 2026, up from the current 40 per cent.
State Finance Minister Datuk Seri Masidi Manjun said Sabah companies are projected to earn RM2.2 billion in revenue by year-end, representing a 300 per cent increase from the mere 10 per cent of OGSE contracts held by local players when the State began its push for greater participation in 2021.
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“Local content is no longer just an aspiration, it is now a measurable, actionable and enforced agenda,” Masidi, who is also SMJ Energy Sdn Bhd Chairman, told industry players at the Sabah Oil and Gas Services Council (SOGSC) Networking Night 2025 at the Hilton Hotel, here, on Sunday.
He, however, acknowledged a gap in local employment, pointing out that 71 per cent of OGSE roles in major companies operating in Sabah are still held by non-Sabahans, with only 29 per cent filled by local workers.
“This cannot continue,” he said, adding the establishment of a Joint Task Force under the Sabah Local Content Council is to address skills gaps through targeted training in critical roles such as riggers, wire line operators and technicians.
Masidi said the State Government, working with Petronas, is validating all Sabah-licensed vendors to eliminate proxy companies and “Ali Baba” practices.
“If you carry the Sabah name, you must be genuinely Sabah-owned, operated and led,” he said.
He thanked Petronas for committing to releasing the 2026-2028 Kinabalu Activity Outlook by January 2026, giving Sabahan vendors advance notice of upcoming tender opportunities and timelines.
Additionally, he said the OGSE Sabah Conference and Exhibition 2026 will be held on June 4-6, aimed at co-creating a five-year OGSE roadmap covering policy, technology transfer, skills development and local capacity building.
“This is your opportunity to shape the future. Contractors, vendors and partners, your seat at the table is not only welcomed but also needed,” he said.
Through SMJ Energy, Sabah has taken notable equity positions in the oil and gas sector, including a 50 per cent stake in Samarang PSC, which has generated RM1.9 billion from 10 crude cargoes sold to date.
The State also holds equity in four exploration blocks, 25 per cent in PCFS (petrochemicals), 25 per cent in PFLNG 3 Sdn Bhd (shore-based LNG) and over 20 per cent in North Sabah EOR PSC.
“We are not spectators. We are owners, contributors and catalysts shaping the future of the oil and gas industry in Sabah,” Masidi said.
Masidi assured that while the State Government and Petronas will continue to set policies and governance frameworks, safe delivery, quality, timeliness and competitiveness must come from the industry itself.
SOGSC President Datuk Harris Annuar Tan said the Council has grown from 14 members when the current executive committee took office in April 2023 to 100 companies representing active OGSE players in Sabah.
“SOGSC pledges to work very closely with the State Government. We stand as the essential bridge to ensure that as the State unlocks new opportunities, our local vendors are ready, qualified and capable of delivering value,” Harris said.
He called on Sabahan OGSE players to pursue opportunities beyond their comfort zones, pointing out that with State support and SOGSC’s platform, local companies are better positioned than ever to succeed.
