By Khairul Khalid
Wan Zulkiflee Wan Ariffin
There are too many local oil and gas (O&G) companies in Malaysia and not enough jobs for the in the current climate, says Petronas president and group chief executive officer (CEO) Wan Zulkiflee Wan Ariffin.
“There is a big drop in work going around. There is not enough work volume for Malaysian O&G companies in the next five years,” the Petronas CEO said.
Citing an example, Wan Zulkiflee said there are approximately 3,200 O&G companies in Malaysia registered with Petronas. In Norway, there are just 700 O&G companies.
“Another example, there are eight fabrication yards in Malaysia with a total capacity of 120,000 metric tonnes. Next year, it is estimated that there will only be about 20,000 metric tonnes worth of fabrication jobs,” said Wan Zulkiflee.
The Petronas CEO was reiterating the urgent need for Malaysian O&G industry to consolidate to survive the volatile market environment.
“I feel that the consolidation among players within the Malaysian O&G industry is not happening as fast enough.
“Most Malaysian O&G companies are small in size and the industry is very fragmented. I hope that our colleagues in the industry will heed this call and internalise that the only way out of this storm is to combine forces and become stronger players,” said Wan Zulkiflee.
He also added that Petronas has formed a special task force to look into the consolidation of the industry, but at the end of the day the O&G companies themselves to make the move.
Wan Zulkiflee was speaking at a press conference announcing Petronas’ financial results for the third quarter of 2015 (3Q15).
Petronas posted a steep fall in third-quarter earnings for 3Q15 with profit after tax (PAT) down 91% year-on-year to RM1.4 billion.
Petronas’ revenue for 3Q15 fell 25% year-on-year to RM60 billion. For the first nine months of 2015 Petronas’ revenue has fallen 25% to RM187 billion and PAT down 57% to RM24 billion.
Petronas attributed the poor results mainly to its upstream business that was hit badly, with RM5.4 billion written down in impairment charges, as well lower crude and LNG (liquefied natural gas).
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