This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/23/2019

Overview

After five years, since the 2014 global oil price dip, the Malaysian oil and gas industry has recovered with a leaner and stronger foundation.  PETRONAS, the National Oil Company announced a net earning of US$13.4 billion for year 2018, which was more than the combined earnings of 2015 and 2016.

Malaysia’s energy security strategy has always been to export its premium Tapis sweet crude oil and import low-grade oil to refine in its downstream facilities. However, to move up the value chain,  Malaysia is gearing up to increase its refining capacity to become a net oil product exporter.  The Pengerang Integrated Petroleum Complex (PIPC) in Johor, and Sipitang Oil & Gas Industrial Park (SOGIP) in Sabah has been established to cater to this grwoth, almost doubling the refining capacity nationwide from 588,000 bbl/d to 1,158,000 bbl/day.

The discovery of gas reserves off the coast of Sabah and Sarawak, augurs well for  Malaysia.  With expected increase in global production and demand of liquified natural gas (LNG),  Malaysia stands to gain in the LNG growth area with proven gas reserves of 1.183 trillion cubic meters of LNG.  This puts Malaysia at 24th in the global ranking for LNG reserves.  However, even with expanded LNG facilities coming online,  Malaysia is expected to gain smaller increments in market share due to fierce competition from other LNG-exporting countries within the region.

Gas Production, LNG Exports Set To Increase
Malaysia - Natural Gas Production & Net LNG Exports, bcm


Oila and Gas Production and Net LNG Exports
f = forecast. Source: JODI, Fitch Solutions

The chart below showcases the Malaysian and U.S. trade statistics for the following HS Coding for

A: PRODUCTION AND RELATED EQUIPMENT

HS TARIFF CODEDESCRIPTION
841350Oil Well And Oil Field Pumps, Reciprocating Positive Displacement
841360Oil Well And Oil Field Pumps, Rotary Positive Displacement
841382LIQUID ELEVATORS
841392PARTS OF LIQUID ELEVATORS
841960Machinery For Liquefying Air Or Other Gases
842129Oil-Separation Equipment
842139Gas Separation Equipment
842890Oil And Gas Field Machinery For Lifting, Handling, Loading Or Unloading Machinery,Nesoi
843031Coal Or Rock Cutters And Tunneling Machinery, Self-Propelled
843039Coal Or Rock Cutters And Tunneling Machinery, Other Than Self-Propelled
843041Boring Or Sinking Machinery, Self-Propelled
843049BORING OR SINKING MACH NESOI; NOT SELF-PROPELLED
843139Parts Suitable For Solely Or Principally With The Oil And Gas Field Machinery Of Other Lifting, Handling, Loading Or Unloading Machinery
843143PARTS FOR BORING OR SINKING MACHINERY; NESOI
843149PARTS AND ATTACHMENTS NESOI FOR DERRICKS ETC.
870520MOBILE DRILLING DERRICKS
890120TANKERS FOR THE TRANSPORT OF GOODS
890520FLOATING OR SUBMERSIBLE DRILLING OR PRODCTN;PLTFRM
890590LGHT VESSEL; FIRE FLOAT; FLOATING CRANES/DOCKS ETC
847989Oil And Gas Field Wire Line And Downhole Equipment
 
Unit: $US millions 2016 2017 2018 CAGR
 Total Import1,4691,9992,02017.3%
 Total Export1,4921,4691,6284.5%
 Import from USA18319522510.9%
 Export to USA139119107-12.3%
 Exchange Rates (USD-MYR)                         4.15                             4.30                         4.03 
Source: Global Trade Atlas

B: PIPELINE RELATED PRODUCTS
HS TARIFF CODEDESCRIPTION
730411LINE PIPE FOR OIL OR GAS LINES NSM; STAINLESS STL
730419LINE PIPE FOR OIL OR GAS LINES NSM; NESOI
730422DRILL PIPE USED FOR OIL;GAS DRILLING;STAINLS STEEL
730423DRILL PIPE USED FOR OIL;GAS DRILLING;IRON/ STEEL;N
730424CASING AND TUBING FOR DRILL OIL/GAS;NES;STANLS STL
730429CASING AND TUBING;OIL;GAS DRILLING; IRON OR STEEL
730511PIPE; OIL LINE ETC OV16IN IR ST; LONG SUB ARC WELD
730512PIPE; OIL LINE ETC OV16IN IR OR ST; LONGI WD NESOI
730519PIPE; OIL LINE ETC OV16IN IR OR STEEL; CLOSE NESOI
730520CASING; OIL OR GAS DRILLNG OVER16IN; IRON OR STEEL
730611PIPE FOR OIL OR GAS PIPELINES WELD OF STAINLS STL
730619PIPE FOR OIL OR GAS PIPELINES IRON OR STEEL NESOI
730621CASING ETC OIL OR GAS DRILLNG; STNLS  STEEL NESOI
730629CASING ETC OIL OR GAS DRILLNG; IRON OR STEEL NESOI
731100CONTNRS FR CMPRSSD O LQFD GAS OF IRON O STEEL
 
 
Unit: $US millions 2016 2017 2018 CAGR
 Total Import43460257214.8%
 Total Export1523051551%
 Import from USA181613-15%
 Export to USA51520100%
 Exchange Rates (USD-MYR)                         4.154.30                             4.304.03 
Source: Global Trade Atlas

 C: EXPLORATION AND RELATED PRODUCTS
HS TARIFF CODEDESCRIPTION
8207130000Rock drilling or earth boring tools, and parts thereof: with working part of cermets
8207193030Rock drilling or earth boring tools, and parts thereof: including parts with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium: percussion rock drill bits
8207193060Rock drilling or earth boring tools, and parts thereof: including parts with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium: rotary rock drill bits, core bits and reamers
8207193090Rock drilling or earth boring tools, and parts thereof: including parts with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium: other
8207196030Rock drilling or earth boring tools, and parts thereof: including other parts : percussion rock drill bits
8207196060Rock drilling or earth boring tools, and parts thereof: including other parts : rotary rock drill bits, core bits and reamers
8207196090Rock drilling or earth boring tools, and parts thereof: including other parts : other
8430310040Self-propelled rock breaking machines
8430310080Self-propelled coal or rock cutters and tunneling machinery: other
8430390040Other rock breaking machines
8430390080Other coal or rock cutters and tunneling machinery
8430410000other self-propelled boring or sinking machinery
8430498050Other boring or sinking machinery
8431499025parts of coal or rock cutters and tunneling machinery: cast axle housings
8431499030parts of coal or rock cutters and tunneling machinery: other
8467115010rock drills
8474100090stationary sorting, screening, separating or washing machines
8474200050crushing machines
8474200070other crushing or grinding machines
8474900010parts of sorting, screening, separating or washing machines
8474900020parts of crushing or grinding machines
 
Unit: $US millions 2016 2017 2018 CAGR
 Total Import16328925224.3%
 Total Export1691481978%
 Import from USA9131110.6%
 Export to USA481615-44.1%
 Exchange Rates (USD-MYR)                         4.15                             4.30                         4.03 
Source: Global Trade Atlas

Leading Sub-Sectors

With the Pengerang Integrated Complex (PIC) on track for commissioning towards full operation in the fourth quarter of 2019, PETRONAS will focus on its upstream activities with an expected US$12.23 billion CAPEX.  Previous CAPEX (US$11.11 billion : 2018; US$10.88 billion: 2017) were largely taken up by downstream portfolio examples such as the PIC Refinery project. 
With falling oil and gas production from its matured field, PETRONAS is betting on its local and foreign Liquid Natural Gas (LNG) investment as their next long term growth path.     

Opportunities

Strong market prospects include drilling tools, finishing tools, pressure control equipment, mud equipment, cementing equipment, perforating systems, multilateral well completion systems, core completion products, down-hole testing systems, blowout preventer systems, artificial lift systems, sub-sea Christmas trees, etc.

Completion fluids and perforating optimization and completion hardware geared toward maximizing recovery for justifying large capital investments in deepwater fields have market potential.

Intelligent completion and control architectures, multilateral systems, sand control solutions and expandable completion systems, which ensure production maintains high levels, will also have strong potential.

We also see enhanced oil recovery, high CO2 gas fields, high pressure / high temperature, deepwater, and infrastructure projects for petroleum operations.

Another prSopect is the decommissioning of shallow water assets that will be up for retirement after 2020. Malaysia started oil exploration activities in shallow waters in the 1970s and started active extraction and production in the 1980s till today.  There are currently over 900 offshore platforms of which almost 600 of them are over 20 years old.  Most of these platforms were were built with an expected lifespan of 25-30 years but were not built with decommissioning as a follow-up plan.  Most were retrofitted to optimized usage and extending lifespan but these will not last indefinitely without compromise to safety of the platform.

Web Resources

 

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