Govt to review policies related to OGSE industry, says Rafizi - video Dailymotion

The Star

The government will be reviewing the policies related to the oil and gas service and equipment (OGSE) industry, said Rafizi Ramli.  The Economy Minister told reporters after the launching ceremony of the OGSE Census 2024 on Thursday (June 6) that the review is to enable the sector to be more global, sustainable, agile and divergent because the global trajectory of the OGSE industry is much more positive now compared to six years ago.  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

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00:00This is the first time that a dam for the oil and gas sector has been launched.

00:20It has never happened before.

00:22But we take into account, apart from the importance of the OGSE industry to the country's economy,

00:34also to the resilience of this industry.

00:42And at the government level, the Ministry of Economy through the Ministry of Primary Industries

00:48is in the process of saving for the HALA 7 OGSE plan.

00:54And because of that, the latest information and statistics to enable us to understand

01:02the current situation of this industry is very important.

01:07For your information, this industry has gone through a challenging period between 2015 and 2016,

01:17and also during the COVID-19 pandemic.

01:20And the period from 2015 until now,

01:28is still causing our local industry players to struggle with many challenges.

01:37So that's why this is a good time for us to save again.

01:41Especially from the perspective that the oil and gas industry in Malaysia

01:49has actually changed drastically in the past 15 years.

01:56The output of the country's oil has dropped from its peak of 650,000 tonnes per day

02:06to around 360,000-370,000 tonnes per day.

02:12The same goes for the gas industry.

02:16At the time, the demand for natural gas increased every year.

02:22At the same time, the output of the country is no longer able to meet the demand.

02:28So these changes require not only a restoration of the government's foundations,

02:37but also a more sustainable and agile OGSE sector

02:46that does not only look at the local market.

02:52This banquet will last for three months,

02:55and the income from this banquet will allow us to ensure that the savings

03:03to the foundation related to the OGSE sector are made better with the cooperation of the industry.

03:12When will the government introduce a budget for the OGSE sector?

03:17We have a 7-year plan.

03:19The 7-year plan is usually made for a 10-year period.

03:23So the 7-year plan was launched in 2021-2030.

03:28But actually, a lot has changed since it was launched until now.

03:36One of the main changes is the government's agenda

03:43to achieve a sustainable energy composition by 2050.

03:52And that has caused some major decisions to be made.

03:57While we need new energy capacity to be built quickly,

04:08there will be times when we need more gas supplies in the country.

04:16So actually, the consumption pattern has changed 100%.

04:21From the time the plan was made in 2020,

04:25with this point forward until 2050.

04:28So the supply demand has changed, the consumption pattern has changed,

04:32the nature of the industry has changed.

04:35So because of that, the time is actually quite important

04:39for us to save everything and restore it.

04:42The main level that the OGSE companies seem to be wanting

04:50according to the association is the finance level.

04:56Does this government have the capability

05:00to give help on that basis to OGSE companies?

05:08That goes back to what I mentioned just now.

05:12The existing financing ecosystem

05:20was partly an outcome of the drag of 2015-16.

05:26If you recall, some of the more notorious cases

05:32of either publicly listed companies,

05:35most of them were oil and gas.

05:38For the last few years, as a result of that period,

05:44the bankability of the oil and gas OGSE companies

05:50obviously comes with a higher risk profile

05:52as a result of what happened in the last 10 years.

05:56But things have changed as well.

05:58In a sense, for example, the crude oil price has been quite steady.

06:06I think there's a realisation in the world,

06:09not just in Malaysia, but in the world,

06:12that we are looking at a face down,

06:15not an abrupt face out of fossil fuel.

06:19So crude oil, gas is going to be there

06:25and therefore the trajectory of the industry

06:29is a lot more positive now than for example

06:33five, six years ago.

06:35So the signalling from government is also very important

06:41so that the financial sector can realign

06:46to the new reality of the oil and gas industry.

06:51At the same time, I think at the very least,

06:55at Kementrian Ekonomi, we are working on specific initiatives

07:03for oil and gas industries.

07:06Because given the risk profile and so on,

07:10it has to be treated slightly differently.

07:13So I think discussions are ongoing

07:17about extending credit lines, private credits,

07:22to qualified oil and gas companies.

07:26But I think the interest in oil and gas companies are coming back.

07:31So I think the drag of the last two, three years will slowly improve

07:36and that's why it is very important as well

07:38that the signalling and policy alignment from the government has to happen.

07:42Otherwise, financing will be quite a challenge for them.

07:47For OGSE, we are looking at building a resilient

07:53and agile oil and gas sector.

07:57First, because they are a big player in our economy.

08:02Many people, hundreds of thousands at least, are employed in this.

08:08Kementrian, the GDP contribution,

08:11Kementrian, the role that they need to play in energy transition.

08:15So we need to catch up in terms of revving up our renewable capacity.

08:22But the skill that is needed and the talents that are required to do that,

08:28actually they are transferable from OGSE.

08:31So unless we are able to make the OGSE sector

08:35go beyond your traditional upstream plan

08:39into a wider energy transition business,

08:43then not only will the OGSE sector miss that opportunity,

08:49but we will also have a problem in terms of the queue of talents

08:54and requirements for technical capability

08:58in order for us to achieve our energy transition.

09:01So the OGSE survey is actually from that perspective

09:05because the OGSE sector is a key enabler to all these macro policies

09:11that have been done.

09:12We just need to make sure that we can deliver this as planned

09:17and for that we need a very resilient and agile and strong OGSE sector.

Govt to review policies related to OGSE industry, says Rafizi

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