Oil and gas production has been central to Malaysia's growth ever since oil was first drilled in Sarawak at the start of the 20th century. Given Malaysia's prolific hydrocarbon resources, it comes as no surprise to industry watchers that the government's focus will continue to be placed on developing the country's oil and gas sector moving towards 2020.
Developing Asian Economies to Lead O&G Demand
Global oil and gas production has grown by around 1.5 percent per year in the last decade driven by rising demand from developing countries, notably China, India and Southeast Asia, according to a report by the International Energy Agency (IEA) released in July 2012.
Oil demand in the developing world, said the IEA, will overtake that in industrialized countries for the first time this year, a tipping point in oil demand geography.
"Strong economic growth in Asia, the former Soviet Union and the Middle East has pushed up demand in these regions, while the Eurozone and the U.S. remain weak," the IEA report noted.
Meanwhile, a tighter balance of supply and demand is expected in both oil and gas markets by the middle of the decade, as demand growth catches up with supply infrastructure. Beyond 2014, the momentum for deepwater exploration – especially among emerging economies – is expected to markedly increase as easy plays among shallow waters become rarer, research group Douglas Westwood revealed in a July 2012 presentation.
Against Asia's structural shortage for hydrocarbons, in particular oil, it is no surprise that Malaysia – a country famed for its light, sweet crude produce – is placing a renewed interest on developing its oil and gas industry.
Malaysia's oil and gas policy, which historically has focused on maintaining its reserve base, has evolved in recent years. A roadmap published by the Malaysian government in July last year states that the country aims to achieve the following oil and gas-related goals:
Hiring Spree Starts Amid Pressures to Deliver on Goals
The Malaysian government noted that in order to deliver on its long-term oil and gas goals, it needs to develop its manpower infrastructure. In its report, the government disclosed that the country, alongside with state-owned and private enterprises, will be looking to hire over 60,000 workers by 2020.
"A significant proportion of these jobs will be highly-skilled jobs, with an estimated 21,000 (40 percent) for qualified professionals such as engineers and geologists, with monthly salaries in the range of $1,618 to $3,236 (MYR 5,000 to MYR 10,000)," the report revealed.
The Malaysian government pointed out that the bulk of its hiring efforts will be targeted at the country's oilfield services segment, liquefied natural gas (LNG) exploration and trading sector and its small field development strategy.
Oilfield Services Segment to Lead Employment Boom
In the case of the country's oilfield services sector, the Malaysian government remarked that no other country in the world comes as a close second to challenging Malaysia as an oilfield services hub.
"While there are dispersed pockets of activity, there is no clear hub elsewhere in the world. With a burgeoning domestic oil and gas industry, proximity to oil fields and a cost-competitive workforce, there is potential for Malaysian companies to first become domestic champions and then subsequently regional champions as they capture a larger share of the market," the report said.
As part of its transformation initiative, Malaysia is aiming to focus on attracting international oilfield service companies to relocate their global operations to the country and enter into joint ventures to move up quickly on the technological curve.
In line with its aim to grow the oilfield services sector, Malaysia anticipates that around 40,000 additional workers will need to be employed to support the industry.
Small Field Development Sectors Show Bright Prospects
The Malaysian government also laid out an equally strong mandate for the country's LNG sector. An intricate long-term employment blueprint has been weaved by Malaysia's leadership as the country looks to position itself as Asia's LNG hub for storage, trade and transportation for the commodity.
"For the first phase, which is to be commissioned by this year, a capacity of 3.5 million tonnes of LNG per annum has been planned (actual capacity, cost and timing will be determined by Petronas). Petronas will execute all elements of the end-to-end gas delivery including partial marketing of this imported gas," the report stated.
Like its oilfield services sector, Malaysia is banking on its cost advantage – over that of neighbor Singapore – to realize its LNG potential. The Malaysian government projected in its 2020 vision that the rise of country's LNG industry would provide the foundation for some 27,000 new jobs; the bulk of which is concentrated to support the construction of the fixed and floating elements of gas regasification and processing projects in Johor and Sabah-Sarawak.
In the small field development area, the spotlight is on developing the country's small risk contracts. The Malaysian government noted that a significant proportion of Malaysia's remaining petroleum resources are sited in fields with less than 30 million barrels of recoverable oil.
"Developing these fields in an economically attractive manner is often challenging, as they need the same expensive infrastructure as large fields, while the expected revenue streams are smaller due to the smaller reserve sizes," the government admitted.
As such, despite the relatively high price of crude, the small risk contract industry is characterized by smaller employment growth numbers when compared to the oilfield services and LNG regasification sectors.
While small risk contracts have much interest among international oil exploration companies, the industry's development has been slow amid strong differing viewpoints between Petroliam Nasional Berhad (Petronas) and international oil corporations.
Back in 2011, Petronas noted that it aimed to award four marginal fields per year. However, thus far, only the Kapal-Banang-Meranti and Balai fields have been dished out. This offers a plausible explanation for the country's conservation employment growth rate; the industry is expected to generate slightly below 400 new jobs by 2020.
But development in the small risk contracts sector could evolve rapidly in the near-term. Industry watchers agree that Petronas could ramp up its efforts on the small risk contracts front and look to award more contracts this year as it seeks to compensate for the shortfall of its development target in the previous years.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you