KUCHING: The oil and gas landscape will be a whole different world in the aftermath of the Covid-19 pandemic, said Petronas Carigali Sdn Bhd chief executive officer Bacho Pilong.
He said oil and gas industry players would be looking to revisit their business model, partnerships and plan forward on how they want to sustain their business.
Bacho said for the local industry, they had to contain costs following the drop in production volume and plummeting oil price.
“The outlook for 2020 is not that encouraging but we are trying our level best to minimise the impact.
“With regard to oil and gas services and equipment providers in Malaysia, the names in Sarawak would be Petra Resources, Dayang Enterprise…there are many players. There are 30 public listed companies (PLCs), with a market cap of RM80bil.
“It is unfortunate that the top 24 PLCs have lost 50 percent of the market cap, that is how severe the industry has been affected by Covid-19,” he said in a webinar hosted by University Malaysia Sarawak (Unimas) on Wednesday.
Bacho said retrenchment was also one of the ways companies were resorting to in order to stay afloat.
“It is unfortunate that many organisations are releasing their personnel but for Petronas, we have not resorted to this approach…we have not laid off any of our personnel.
“…except some of our colleagues who are reaching retirement age who are usually given contract extensions but now, many of them are not able to have that privilege of working beyond the retirement age.
“This is the kind of measures we have to take,” he said.
He added that with the economic downturn, industry players would see some kind of consolidation as small companies could not survive on their own.
“I’m hoping to see consolidation, because consolidation is good in a sense that it will strengthen the players financially, strengthen them in terms of capability and hopefully they can play in a bigger pool rather than concentrating on the market in Malaysia.
“I think service providers should be able to focus at least on the market as a regional player. The market is big out there.
“If you were to rely on Malaysia market, it is limited in terms of growth, but if you are strong enough and you can trade elsewhere, that should be the purpose of some of our Malaysian players,” he said.