KUALA LUMPUR: Malaysian oil and gas services and equipment (OGSE) companies must diversify their businesses to remain competitive amidst signs of greater market volatility in 2019, said Malaysia Petroleum Resources Corporation (MPRC).

Deputy chief executive officer Mohd Yazid Ja’afar said while oil prices had risen since the beginning of the year, concerns about a supply glut and weakness in the global economy would keep prices on a tight leash, as evident from the general cautiousness of global oil companies and their continuous push for cost efficiencies.

“Even as the industry is seeing a gradual recovery in activities, the oil price uncertainty is a clear reminder to OGSE players to stay focused and become more competitive.

“Companies that turn to innovation, hone niche technologies to gain economic advantages, employ and retain skilled talent, and embrace diversification particularly into the downstream segment, are in a better position to undertake new growth ventures in Malaysia and beyond,” he added.

Meanwhile, MPRC said MISC Bhd took the top spot in the Top 100 Malaysian OGSE companies, followed by Sapura Energy Bhd and Dialog Group Bhd.

The list was based on the companies’ revenue performance in the 2017 financial year (FY17).

MPRC said analysis from the MPRC100 showed that the overall Malaysian OGSE sector recorded a 1.1 per cent decline in total revenue to RM68.1 billion in FY17 from RM68.8 billion in FY16, while pre-tax profit was also lower due to asset impairment charges undertaken by asset-heavy companies.

“The FY17 findings also demonstrated that Malaysian OGSE companies fared better than their regional counterparts due to ongoing domestic activities in the upstream and downstream segments.

“In a 2017 comparison with the top 20 OGSE companies in Southeast Asia, Malaysian OGSE firms registered an average revenue growth of 12 per cent while other regional players showed an average revenue decline of 14 per cent,” it added. – Bernama