Tradeview Capital fund manager Neoh Jia Man said the activity outlook 2026 to 2028 flattish outlook was due to the lower global oil prices. — Reuters
PETALING JAYA: Petroliam Nasional Bhd (PETRONAS) activity outlook from 2026 to 2028 shows a bleak period as the national oil and gas giant deferred or cut its capital expenditure (capex), says CGS International (CGSI) Research.
The research house said some categories of upstream services including fabrication would rebound in 2026 but others like modification, construction and maintenance, offshore support vessels would slide.
“In 2025, PETRONAS and other petroleum arrangement contractors in Malaysia, undertook fewer upstream capex activities than were indicated in the activity outlook 2025 to 2027 report released in January 2025.
“Virtually all categories of oil and gas services and equipment (OGSE) work suffered a negative variance between projected and actual volumes for last year,” the research house said in a report yesterday.
Tradeview Capital fund manager Neoh Jia Man said the activity outlook 2026 to 2028 flattish outlook was due to the lower global oil prices.
“There is a lack of catalyst for the local oil and gas sector looking at the PAO 2026 to 2028, given the lower oil prices. However, most of the downsides have been priced in by the market,” he told StarBiz.
To this end, MBSB Research said the recovery seen in Brent crude oil prices in January was sentiment-driven and range bound, with prices briefly testing the US$70 per barrel level.
“This was on geopolitical and marginal supply disruptions but lacking demand-led conviction and failing to signal a structurally tighter oil market,” the research house said.
MBSB Research said its top pick for the oil and gas sector is Dialog Group Bhd
. It has a “buy” call, with a target price of RM2.17, as it favoured the company for its defensive midstream exposure, anchored by its extensive tank terminal and infrastructure assets.
“The group’s earnings profile is largely underpinned by long-term take-or-pay contracts and lease arrangements, providing stable and recurring cash flows that are largely insulated from short-term crude price volatility,” the research house said.
On the outlook for OGSE work volumes, CGSI Research said it is somewhat improved in 2026 as some of the 2025 deferred work volumes are now planned by PETRONAS for execution this year.
“Oil country tubular goods tonnes, linepipe lengths, diving support vessel days, transportation and installation lifts and installations and hook-up and commissioning man hours are scheduled for a year-on-year jump in activity this year after a weak 2025,” it said.
Meanwhile, CGSI Research said the most positive upstream category is fabrication and well services; fabrication contracts awarded in 2025 were upgraded to heavier structures and PETRONAS expected the same for 2026.
“The number of wells serviced by OGSE players outperformed PETRONAS’ guidance for 2025 and will grow annually in 2026 to 2027, according to activity outlook 2026 to 2028,” the research house said.
