Malaysian OGSE firms told to build track record, venture overseas

KUALA LUMPUR: Malaysian oil and gas services and equipment (OGSE) firms are urged to develop expertise and venture abroad, according to CIMB Securities Sdn Bhd. The research firm noted that OGSE companies were encouraged to build strong domestic records and collaborate with larger players in international projects at the 8th Malaysia Oil & Gas Services Exhibition and Conference.

Support measures included demonstrating technologies locally, recognizing completed projects, and participating alongside larger firms in overseas initiatives. CIMB Securities emphasized that overseas expansion should align with companies' technical capabilities, management capacity, and financial resources. The report highlighted that securing the right contracts is more crucial than simply increasing order book numbers, especially when contracts involve significant execution or working capital risks.

Participants also advocated for procurement practices to prioritize overall project value, delivery reliability, and performance over the lowest upfront price. OGSE participants acknowledged that initial savings might be offset by delays, downtime, and higher maintenance costs. A collaborative approach was deemed essential, establishing shared performance targets, allocating risks to the most suitable parties, and allowing contractors to benefit from better execution.

Clear baselines for time, cost, uptime, and quality were necessary to measure these rewards, with safety remaining non-negotiable, according to CIMB Securities.