PETALING JAYA: OMS Energy Technology Inc is looking to bolster its manufacturing capabilities, widen its customer base and expand its product portfolio going forward.
The Singapore-headquartered, Malaysian-led oil and gas equipment manufacturer’s founder and chief executive officer How Meng Hock (pic) said the group will focus on enhancing its manufacturing processes, with efforts such as additive manufacturing to improve efficiency and strengthen its supply chain.
How said the adoption of additive manufacturing in the oil and gas sector has been “a little slow” compared with industries such as aerospace and maritime. He added operators remain conservative because the industry deals with high-pressure, high-temperature conditions and heavy equipment with stringent requirements.
That said, How sees two opportunities in additive manufacturing – one for internal use in producing spare parts for machines or certain tools faster and more cheaply, and another in designing product components to improve logistics and supply chains.
“We run manufacturing plants with many machines and measuring instruments, and sometimes we need spare parts for the machines or certain tools.
“Using traditional procurement can take a longer time and be more expensive. For machine parts that may not be so critical, we can use additive manufacturing to produce them.
“From a product perspective, the challenge is that all our equipment is governed by international standards like the American Petroleum Institute (API). So the components we manufacture must meet the minimum standards established by the API,” he told StarBiz in an interview recently.
Major customers such as Aramco, Shell and Chevron also have their own specifications on top of API’s requirements. Hence, there are opportunities to use additive manufacturing to improve supply chains and reduce costs.
“Our surface wellhead systems, although governed by API, are still OMS designs, which means we have room to tweak, adjust and redesign certain components using additive manufacturing to improve logistics and the supply chains,” he said.
How, a Batu Pahat-born engineer, led a management buyout from Sumitomo in 2023, paving the way for the company’s Nasdaq listing in May.
OMS manufactures surface wellhead systems (SWS) and Christmas trees, which are critical for controlling and regulating flow at the top of oil and gas wells.
The group also produces oil country tubular goods, including heavy pipes, casings and connectors for underground applications, along with premium threading services to shape and seal pipe ends for safe connections.
OMS operates in Singapore, Saudi Arabia, Indonesia, Thailand, Malaysia and Brunei, and offers premium threading services in five of these markets – Indonesia, Malaysia, Thailand, Brunei and Singapore.
Having raised US$33.3mil through its initial public offering (IPO), the group had allocated 12% of the proceeds for product research and expansion development, which involves key areas like additive manufacturing.
In January 2024, OMS signed a 10-year contract for the supply of specialty connector and pipes with Saudi Aramco.
The deal is expected to generate around US$200mil in annual revenue. Saudi Aramco contributed 71% of OMS’ total turnover as at Sept 30, 2024.
How acknowledged that while the contract with Saudi Aramco involves large volumes and therefore carries a high value, it also creates customer concentration risk.
This has prompted the group to step up efforts to grow its surface wellhead and Christmas tree businesses in Indonesia, Thailand, Malaysia and other markets.
“Although it is a 10-year agreement, Saudi Aramco has no minimum purchase obligations.
“We put in a base price for 10 years, and every quarter the price is indexed based on logistics, labour and inflation. As such, the price moves up or down each quarter.
“Aramco then looks at its inventory and operations and places an order. For one quarter they may order 100 units, another quarter 50, another quarter 150 – or sometimes none at all if they have more inventory or that their operation is more active.
“So there are fluctuations. The last two to three years have been good because they were quite active, but going forward, we have to manage that,” How said.
He added many of the group’s major customers encourage localisation, which require suppliers to build facilities, hire local workers and transfer technology in order to do business in their countries.
OMS built a manufacturing facility in Saudi Arabia in 2020, which helped meet local-content requirements and strengthened its position in the market.
How said the focus now is to look beyond Saudi Arabia, namely in South-East Asia.
The other product line that has been growing, while not as fast, is SWS and Christmas trees, where Indonesia is the main driver of growth.
Further, OMS’ premium threading services remain a recurring source of income for the group, as “almost every country, other than Saudi Arabia, has that capability”.
“There are opportunities in Asia and other parts of the Middle East. We serve Oman, the United Arab Emirates, Egypt, and we also have a small project in Angola. Indonesia has been active for surface wellheads.
“We are stepping into Thailand, and we are looking aggressively at how to expand in Malaysia and the rest of South-East Asia. However, in terms of sheer volume, Saudi Aramco will always be the largest and it is very difficult to replace them,” he said.
As for Malaysia, How said he will still “keep an eye” on the country, amid the protracted dispute between Petroliam Nasional Bhd (PETRONAS) and Sarawak’s state-owned Petroleum Sarawak Bhd (Petros) over control of licensing and gas distribution rights in Sarawak.
Malaysia currently contributes about 12% to 15% of OMS’ revenue, but the company believes that if the dispute is resolved, its Malaysian business could rise to as much as 20%.
OMS has facilities in Johor Baru, Kemaman and Labuan in Malaysia.
“We are already seeing a bit of a slowdown due to the dispute. Should there be no resolution, our revenue contribution from Malaysia may decrease but it will not be a lot.
“That is where capital and cost discipline will come in to maintain our position in the market. Once the dispute is resolved, PETRONAS and Petros will likely play a bit of catch-up because they are behind in terms of their activities, so activity levels should start to pick up again,” he said.
How said that unlike many companies that pursue an IPO primarily to raise funds, OMS’ Nasdaq listing was more on the branding aspect, to take the company to the next level.
He said the group remains cash positive, with US$128.7mil in cash as of Sept 30, 2025 and no debt.
With the strong cash position, How said the group is now evaluating merger and acquisition (M&A) opportunities, emphasising that any potential target must fit OMS’ culture, product offerings and long-term strategy.
“Given our strong capital structure, and the fact that we are sitting on quite a bit of cash, the question is how to maximise that cash position to grow the company. M&A is probably one of the quickest ways to grow,” he said.
The group does not have a dividend policy yet and is not expected to have in the near term.
“We are looking into it. We would like to reward shareholders, especially since we have a strong cash position, but we also need to balance the expectations of different investor groups.
“In Asia, investors generally prefer dividends, while in the United States dividends are taxed and shareholders tend to prefer capital gains. So we have to find the right balance, and that will come later on,” he said.
