Yazid said MPRC would be looking at a mid-term review next year to evaluate new initiatives which would be targeted to be shared in 2025.
KUALA LUMPUR: The oil and gas (O&G) industry will be able to leverage on some of the measures announced during Budget 2024, says Malaysia Petroleum Resources Corp (MPRC) president Mohd Yazid Ja’afar. MPRC is an agency of the Economy Ministry that is tasked with developing the country’s O&G services and equipment (OGSE) industry.
The measures included the substantial financing subsidies for small and medium enterprises (SMEs) that will amount to RM44bil.
“About 85% of OGSE companies are SMEs so we are glad that this year’s budget was fair and would be able to cover the needs of the SMEs next year,” he told StarBiz on the sidelines of the National OGSE Roadshow 2023 here yesterday.
According to Yazid, another measure that will benefit the industry is the technical and vocational education and training (TVET) sector that will see a total allocation of RM6.8bil under the budget.
“This will address the talent shortage issue we are facing. The shortage began a few years ago during the Covid-19 pandemic. As the economy reopened, more projects were approved and subsequently the demand for talent.
“A mismatch between what is required by the industry and the people looking to be hired may also be a cause of the talent shortage,” said Yazid.
This is why the TVET initiatives by the government will assist, whereby programmes to upskill, reskill and retrain will be made available.
“For example, in the downstream sector, our subsidiary Johor Petroleum Development Corporation (JPDC) conducted training to ensure that people were meeting the demands of the industry. One of the conditionsis the need to secure a job in the downstream sector,” he said, adding that some of the challenges in the industry included the difficulties in getting assistance from financial institutions.
He explained that moving into green energy or projects were costly and it was tough for the companies to convince banks that they were worthy of funding.
“The journey of decarbonisation needs to be supported. Unfortunately, some companies, particularly in the industry, have earned a bad reputation and have been labelled unfairly,” he said.
For next year, Yazid said the MPRC would focus on sustainability as there is an urgent need to have a robust plan for the SMEs to move forward.
“We must comply with what has been set upon us in line with the government’s plans. Sustainability, compliance and how to get there will remain the key focus areas for us.
“There are still gaps that need to be closed and we must work together with the ecosystem to achieve this,” he said.
As a custodian of the National OGSE Industry Blueprint, the MPRC had rolled out 31 initiatives plus five under the purview of Petroliam Nasional Bhd.
Some of the initiatives included RM12.9mil in the OGSE development grant for 54 companies as well as the recognition of prior experiential learning programme this year.
Yazid said MPRC would be looking at a mid-term review next year to evaluate new initiatives which would be targeted to be shared in 2025.
It is still a long road ahead for the OGSE and the MPRC will need to ensure the longevity and sustainability of the industry.
“This is especially vital amid the energy transition scenario where OGSE players need to make the pivotal moves to comply with sustainability requirements and new business models to meet the country’s low- carbon aspirations,” he pointed out.
Meanwhile, Economy Minister Rafizi Ramli said OGSE players must embrace energy transition as it would be able to solve many concerns.
He said the government had looked to remedy this through the National Energy Transition Roadmap (NETR).
“The NETR outlines 10 flagship projects that will open up to RM1.85 trillion in investment opportunities by 2050.
“This is one of many efforts that will open areas of collaboration for OGSE SMEs.
“It will facilitate decarbonisation and improve environmental, social and governance,” Rafizi said in his keynote address, which was read out by the ministry’s secretary-general Datuk Nor Azmie Diron.
Furthermore, the younger generation can look forward to joining companies with green values, according to Rafizi.
“This has to be on top of efforts to upskill our current group of workers to make them competitive.
“This in turn will ensure that they remain in Malaysia and are not going overseas,” he said.
“The OGSE industry is in the business of growth. By reshaping our business model through energy transition, I am confident that it will continue to drive Malaysia’s economy forward – as it has done for many years,” Rafizi added.
