KUALA LUMPUR: Malaysian oil and gas (O&G) companies must consider exploring consolidation opportunities within the fraternity to increase competitiveness and put the industry in a good stead when the global oil market recovers.
Petroliam Nasional Bhd (Petronas) President and Group Chief Executive Officer Datuk Wan Zulkiflee Wan Ariffin said consolidation opportunities were plentiful.
"Those with heftier cash and other means to fund consolidation and guided by a clear strategic focus, will be able to beat competitors to the negotiating table for winning deals," he said.
The manoeuvres, he added, would also position the companies ahead of the pack when oil prices recover.
Wan Zulkiflee said this in his welcoming remarks at the Asia Oil and Gas Conference 2015 here on Monday.
The event was officiated by Prime Minister Datuk Seri Najib Tun Razak.
Wan Zulkiflee said organisations with strong fundamentals in the form of integrated and spread portfolios, solid cash balances and high value-assets would weather the storm better.
He also urged O&G companies to expand beyond individual organisations through collaborative measures to tackle the issue in wider spheres of influence.
"The industry must respond in a cohesive manner to make a tangible impact towards lowering costs and driving up efficiency levels.
"As competition for new businesses and protecting existing ones becomes more intense in the current environment, it provides an opportunity for organisations to sharpen their focus on developing key strengths as differentiators to own competitive spaces," said Wan Zulkiflee.
He said the repercussion of the drop in oil price had resulted in O&G companies relooking their business processes and cost structures in frantic efforts to drive down expenditure.
"This presents an opportunity itself, if we view it not only as a stop-gap measure, but take efforts to ensure that processes and cost structures are re-designed for simplicity and support long-term lower operation costs and higher efficiency," he added.
Themed,"Realising Opportunities Amidst Challenges", the three-day conference which ends tomorrow, has attracted 1,702 participants from 18 countries.- Bernama