(From left) Syed, Yazid, Razali and moderator Natrah Mohd Tahir, PETRONAS group procurement sustainability unit head, during the panel discussion on the first day of OGA 2025.
Asia continues to advance rapidly, demanding cleaner, secure and affordable sources of energy. Against this backdrop, Malaysia’s oil and gas services and equipment (OGSE) industry is at a pivotal point as the global energy transition accelerates.
Competitiveness, capability and agility will determine which players thrive in a market increasingly shaped by sustainability, digitalisation and innovation.
The sector today contributes around 5-8% of Malaysia’s GDP, underscoring its importance to national growth.
Yet, as resources mature and new global pressures emerge, the industry must strengthen its resilience to remain relevant in the years ahead.
Speaking at the PETRONAS panel session on Strengthening Malaysia’s OGSE Ecosystem at Oil and Gas Asia (OGA) 2025, PETRONAS group procurement enterprise category management senior general manager Mohd Razali Kamin cautioned against complacency.
He emphasised that the sector must strengthen technical expertise, embrace digital tools and integrate innovative solutions.
“The current energy landscape is moving very quickly, and OGSE players must evolve with the industry.
“Resilience is not defined by size, but by how well companies adapt, compete and grow,” he said.
Opportunities in a changing landscape
Malaysia’s upstream landscape is evolving rapidly. In 2024, PETRONAS secured RM50bil in upstream investments and awarded a record 14 production sharing contracts.
The PETRONAS Activity Outlook (2025–2027) highlights upcoming decommissioning of 153 wells and 37 offshore facilities, as well as RM30bil worth of contracts in field upgrades, new wells, maintenance and redevelopment.
These opportunities are significant, but readiness is uneven.
Based on the National OGSE Industry Blueprint 2021–2030 Mid-term Review, 85% of OGSE companies have yet to publish sustainability reports, which may leave them at a disadvantage as global buyers demand stricter ESG compliance.
At the same time, 45% of firms lack research and development resources, limiting their ability to innovate in areas such as carbon capture, utilisation and storage (CCUS), digitalisation and decommissioning.
Bridging the gaps
PETRONAS established the Vendor Development Programme (VDP) in 1993 to develop bumiputra vendors, transforming them into technically competent, commercially attractive companies with home grown technologies.
To date, it has nutured 171 companies, several of which have expanded internationally.
In recent years, as part of efforts to bridge these gaps further, PETRONAS and its partners have introduced multiple enablers:
> The Vendor Financing Programme (VFP), channeling RM2.2bil to over 300 applications since 2018.
> The PETRONAS Supplier Support Programme (PSSP), launched in 2024, to help vendors embed ESG practices and access sustainability financing.
> Program Latihan Madani, in collaboration with HRD Corp and CIDB, to upskill graduates and strengthen industry talent pipelines.
Capability gaps also extend to talent. Less than half of PETRONAS-registered vendors actively participate in tenders, underscoring the need for broader and more specialised skills.
Addressing workforce readiness through reskilling and structured programmes such as its Vocational Institution Sponsorship and Training Assistance (VISTA) programme for vocational training and the Industry Talent Framework (InTAF) developed with Malaysian Oil, Gas and Energy Services Council (MOGSC) and Malaysia Petroleum Resources Corporation (MPRC) will be key to ensuring OGSE players can adapt, compete and grow.
Yet Razali was clear: “These are tools, not outcomes.
“PETRONAS can open the pathways, but vendors must walk through them.”
MPRC president and chief executive officer Mohd Yazid Ja’afar echoed the urgency, noting the gaps in digital adoption and sustainability integration.
“We need those capabilities ready when the sector takes off. Transformation is no longer optional, it is urgent,” he said.
From the industry side, MOGSC president Syed Saggaf Syed Ahmad stressed the importance of scaling up and competing regionally.
“Partnerships are the way forward, especially for new technologies like CCUS.
“This is how Malaysia built its oil and gas expertise in the 1970s, and it is how we can move into the energy transition today,” he added, emphasising that collaboration remains essential for resilience across the ecosystem.
Towards 2030 and beyond
The National OGSE Industry Blueprint, now under mid-term review, sets a roadmap built on four pillars: competitiveness, resilience, lower-carbon and diversification.
By 2030, the sector targets to: Sustain its RM50bil GDP contribution, double export revenue, and generate a quarter of industry income from transition sectors such as CCUS, hydrogen and renewables.
These ambitions align with Malaysia’s long-term vision of remaining a trusted global energy partner.
By 2035, PETRONAS will be an integrated energy company serving the world’s energy and solutions needs safely, reliably and sustainably.
Achieving this ambition will require broad collaboration, as sustainability challenges are complex, global and interconnected.
“This is not a journey we can achieve alone. Sustainability requires collective action and commitment from multiple stakeholders to solve the energy challenges ahead,” said Razali.
To achieve this, OGSE players must continue scaling their capabilities, embedding sustainability, and innovating to serve not just today’s needs but also tomorrow’s lower-carbon demands.
With stronger local participation, strategic partnerships and bold execution, Malaysia’s OGSE can secure its role in powering the national economy and position itself as a resilient, competitive and sustainable sector ready to lead in the global energy transition.
