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Sabah launches initiative to boost local OGSE participation


Masidi (middle) with the freshly minted Sabah Local Content Council members.

KOTA KINABALU (May 17): Sabah has taken a major step forward in boosting local participation within its oil and gas services and equipment (OGSE) sector with the launch of the Sabah Local Content Council.

This collaborative effort between the Sabah State Government, Petronas and industry players in Sabah aims to address existing challenges and achieve ambitious local content targets.

Over the past year, significant progress has been made. Between 2022 and 2023, Sabahan companies saw a remarkable 40 per cent increase in revenue generated from OGSE-related jobs.

This trend continued in 2023, with a total of RM1.5 billion worth of OGSE work awarded to local companies, showcasing their expanding capabilities and growing presence in the industry.

Building on this momentum, for 2024, Sabah and Petronas have jointly agreed with a target to award 30% of all OGSE spending within Sabah to qualified Sabahan companies. Additionally, they aim to achieve an 80% Sabahan employment rate within the OGSE industry for the year.

Sabah Finance Minister and SMJ Energy Sdn Bhd chairman Datuk Seri Panglima Masidi Manjun emphasised the crucial role collaboration will play in achieving these targets. He stressed the importance of immediate and collective action from all stakeholders within the industry.

The newly formed Sabah Local Content Council serves as a critical platform for industry players. This includes Petronas, Petroleum Arrangement Contractors (PACs)/Petronas Operating Units (OPUs), and Sabah OGSE associations, fostering collaboration and driving progress.

Its mission is multifaceted, focusing on:

• Enhanced collaboration among industry players to streamline processes and identify opportunities.

• Advocacy for fair tender practices that create a level playing field for qualified Sabahan companies to compete successfully for OGSE contracts.

• Providing skills development programmes to empower Sabahan companies and their workforce, ensuring they have the necessary expertise to thrive in the OGSE sector.

• Monitoring progress towards local content targets to ensure transparency and measure the success of the initiative.

• Identifying and addressing challenges faced by Sabahan companies in securing OGSE contracts, removing roadblocks and fostering a supportive environment for local businesses.

• Promoting transparency and accountability within OGSE tender processes in Sabah, building trust and confidence among all stakeholders.

The council will be chaired by Terry Biusing, Executive Director, OGSE and Corporate of SMJ Energy. The membership encompasses representatives from key government bodies, Petronas and its group of companies operating in Sabah, prominent oil and gas companies like PTTEP Sabah, Hibiscus Petroleum Berhad, Shell and Kebabangan Petroleum Operating Company, as well as local OGSE player associations such as the Sabah Oil and Gas Services Council and Persatuan Kontraktor Petroleum Bumiputera Sabah.

This diverse membership ensures a well-rounded perspective and expertise to guide the council’s efforts.

With the launch of the Sabah Local Content Council and the establishment of the 2024 targets, Sabah is well-positioned for a significant boost in local participation within its OGSE industry. This initiative holds the potential to benefit both Sabahan companies and employees, fostering a more robust and sustainable OGSE sector in the years to come.



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