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Malaysia seen in good position to lure O&G firms from Singapore

Malaysia seen in good position to lure O&G firms from Singapore
Malaysia is seen as being in a good position to attract oil and gas (O&G) players keen to boost cost and operational efficiencies amid the ongoing low crude price environment, local reports said.

Local media quoted industry specialists as saying that Malaysia has the right conditions to attract O&G majors to relocate their regional base there, with Malaysia Rating Corp (MARC) adding that more players would shift their regional base to Malaysia, joining the few US and European majors that had decided to do so recently.

US-based McDermott International, France’s Technip and Oslo-listed Subsea 7 are among top O&G players that have recently announced they were relocating to Malaysia from Singapore in the face of rising costs and declining revenue.

MARC O&G ratings assistant vp Sharidan Salleh said Malaysia was an ideal choice, given its cost advantage and availability of vast O&G activities. Other positive factors include the availability of technical expertise and business efficiency as well as well-established O&G infrastructure developed through the country's long experience with O&G production since the early 1970s, he added.

“O&G industrial areas were developed in tandem with ports to provide connectivity, for example Kerteh and Kemaman in Terengganu, and Bintulu and Miri in Sarawak. Therefore the country is well-positioned to cater to the O&G multinational companies,” Sharidan said.

“On the government side, Malaysia is providing various incentives, including investment and income tax incentives, to strengthen its status as a regional O&G hub. We believe companies relocating to Malaysia will benefit from cost advantage given the lower domestic labour cost, availability of capacity to expand and lower rental cost compared with Singapore,” he concluded.