Malaysia’s Upstream Oil Industry Gaining Momentum

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Those working towards obtaining IADC certifications could find work in Malaysia, if it appeals to them.

According to the Malaysia Petroleum Resources Corporation (MPRC), the country produced, on average, more than 657,000 barrels of oil per day in 2013. The nation has more than 3.7 billion barrels of proven reserves, attracting investment from global energy companies.

Malaysia is implementing innovative strategies to establish and maintain ‘marginal’ fields.

What does this mean for the Malaysian job market? Which factors are encouraging and hindering growth?

Investing in exploration

Ernst & Young (EY) developed an analysis of the Malaysian energy sector three years ago, noting the country is implementing innovative strategies to establish and maintain marginal fields. The nation’s government introduced a number of programs designed to encourage such activity.

One such incentive is the Petroleum (Income Tax) (Investment Allowance) (Marginal Field) Rules 2013 [PU (A) 119/2013]. The Ministry of Finance Malaysia noted that this, as well as other government initiatives will:

  • Reduce the petroleum income tax rate from 38 to 25 per cent;
  • Expedite capital allowance from 10 years to five years; and
  • Exempt companies from paying export duties.

The aforementioned benefits apply to not only those engaging in enhanced oil recovery initiatives but also to those pursuing deep water, infrastructure, high carbon dioxide and high pressure projects.

Attracting business

The MPRC published results of its Oil & Gas Year Malaysia 2015 Investors Index, which surveyed professionals interested in backing energy projects throughout the country. To Malaysia’s benefit, 100 per cent of respondents regarded the Malaysian market as either “highly stable” or “stable”. This means workers with IWCF well control certifications or other such qualifications don’t have to worry about political or economic disruptions when working in the country.

Investors remain optimistic about Malaysia’s economic development.

Like many other countries, Malaysia encountered a small setback when oil prices fell. However, sentiments remain relatively positive. More than three-quarters (76 per cent) of MPRC respondents noted that doing business in the country is “easy”. Although 91 per cent of 2014 survey participants expressed the same sentiment, this slight downturn in confidence may improve as a result of progressive government policies and greater investment in equipment and technology.

In addition, the MPRC Index noted that 73.9 per cent of investors view Malaysia’s oil and gas market as “transparent”. In contrast, a very small portion of survey participants (3.1 per cent) claimed it suffered from corruption.

Malaysia is set to be a huge force in the global energy sector. With further development of upstream technology, the country’s future will solidify.