Update Potential mergers seen among small-mid O&G players, says PwC

by **Cals** Wed 26 Feb 2014, 17:32

Update Potential mergers seen among small-mid O&G players, says PwC

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Wednesday, 26 February 2014 13:11

KUALA LUMPUR (Feb 26): Small and middle-cap oil & gas (O&G) players in Malaysia are likely to see more consolidation going forward given the ‘fragmented’ O&G industry backdrop, according to PwC’s managing partner Sridharan Nair.

Speaking at the launch and awards ceremony of The Oil & Gas Year, Malaysia 2014, Sridharan said the O&G industry is still a ‘fragmented’ market, noting it made up a ‘paltry’ 6.5% of Bursa Malaysia’s market capitalisation last year.

Sridharan said he expected the local O&G players to ‘scale-up’.

“We have seen recent attempts at consolidation between O&G players and for a sector that is technology-driven and capital-intensive, players [O&G firms] can still improve,” he said.

“Companies would need to focus on building capacity. This can be done via a number of ways such as M&As, strategic partnerships, IT investments and talent development, among others,” he said.

The PwC head believes Malaysia’s O&G sector offers enormous growth opportunities, declaring: “We are bullish on the sector. The outlook is ‘rosy’.”

Sridharan said Malaysia has great potential to be a strategic hub for O&G players who wanted access to growing nations and emerging markets given its recognition as a business friendly environment.

He said apart from the Economic Transformation Programme, the O&G industry has been identified as a critical sector in helping Malaysia achieve a high income status nation by 2020.

During the launch of an oil and gas industry book, SapuraKencana Petroleum Bhd’s president and group CEO Tan Sri Dato’ Seri Shahril bin Shamsuddin was conferred the “Man of the Year” award.

Also, UMW Oil & Gas Corporation Bhd bagged the “Initial Public Offering of the Year” award.