Kota Kinabalu: Sabah companies held a record 38 per cent share of oil and gas contracts in the State last year, as the State Government and Petronas push to hit a 60 per cent local ownership target by the end of 2026.
“By the end of last year, Sabahan contracts reached an all-time high of 38 per cent, representing 1,358 active contracts here in Sabah,” said State Industry Development, Entrepreneurship and Transport Ministry Permanent Secretary Datuk Thomas Logijin.
“This milestone reflects the impact of structured policy interventions under the Sabah-Petronas Commercial Collaboration Agreement (CCA) signed in December 2021,” he said at the Oil and Gas Services and Equipment (OGSE) Conference and Exhibition Sabah 2026 held at the Sabah International Convention Centre, here, recently.
He was among those invited to talk at the conference with his topic titled, “Sabah OGSE local content policy and performance”.
Thomas, who co-chairs Sub-Committee 4 under the CCA framework, said the growth trajectory since the agreement was signed has been significant.
“Sabahan vendors held just three per cent of contracts in 2018.
By 2021 when the CCA was signed, that figure had risen to 10 per cent, before climbing to 14 per cent in 2022, 15 per cent in 2023 and then jumping sharply to 26 per cent in 2024.
“This marks an extraordinary growth trajectory with Sabahan contract ownership expanding by more than 20 times total growth in contract ownership since 2018,” he said.
He said the number of licensed and registered Sabahan vendors has grown three times over the same period, with the State recording a 45 per cent surge in registered entities within the first two years following the CCA.
“In 2025 alone, the number of Sabah vendors operating within the State increased by 17 per cent compared to the previous year’s 11 per cent,” he said.
He said contract awards have also translated into tangible revenue gains on the ground.
“Between 2021 and 2025, Sabahan vendors recorded an average revenue growth of 50 per cent year on year.
“The total volume of jobs awarded to local vendors has expanded three times compared to the pre-CCA baseline,” he said.
He acknowledged, however, that the remaining journey from 38 per cent to 60 per cent would require deliberate and strategic effort.
“The target is not just a numerical aspiration. It represents Sabah’s determination to secure a meaningful, structured and sustainable position for local companies within the oil and gas value chain.
“Incremental participation alone will not be sufficient,” he said.
He said Sabahan companies now hold more than 70 per cent market share in several operational categories in the State.
These include marine vessels and logistics, drilling, production and subsurface operations, mechanical, piping and electrical works, safety and instrumentation, civil works, inspection, maintenance, information technology, telecommunications and corporate services.
“Market share above 70 per cent in these categories sends a clear and positive signal to the industry. Sabahan companies are developing real capabilities, building operational credibility and strengthening their position as reliable partners,” he said.
He said Sabah’s participation remained limited in several high-value and technically complex segments where margins are higher and long-term value creation is significantly greater.
These include floater leasing and operations and maintenance, integrated drilling services, anchor handling tug supply vessels, subsea engineering, procurement, construction, installation and commissioning, remotely operated vehicles, subsea inspection, perforation services and coiled tubing units.
“If Sabah is serious about achieving deeper participation and stronger economic returns, then these are the frontiers we must now target with greater agency,” he said.
On that note, he called on every stakeholder to actively engage in the development of the Sabah oil and gas five-year roadmap beyond 2026.
“Let us move forward together with one determination, which is to build a stronger, more resilient and world-class Sabahan oil and gas ecosystem.
“Let us make Sabah not only an oil-resource producing State but a capability-building State, a value-creating State and a leading force in Malaysia’s energy future,” he said.
