KOTA KINABALU, March 18 — Petroliam Nasional Bhd (Petronas) recognises Sabah’s growing role in Malaysia’s oil and gas services and equipment (OGSE) sector, as part of broader collaborative efforts to strengthen the state’s contribution to national energy security and economic development.
Petronas senior vice-president of Malaysia Petroleum Management Datuk Bacho Pilong said the OGSE sector remains a vital pillar of Malaysia’s economy, and contributes between five and eight per cent to GDP.
He said geopolitical uncertainties, supply chain disruptions, decarbonisation pressures, and rising demand for secure, affordable and reliable energy are reshaping the global energy landscape.
“Even as we navigate the rapid changes in the global energy landscape, the OGSE sector remains a vital pillar of the Malaysian economy. With the support and ongoing collaboration with Sabah, we can build a resilient OGSE supply chain that can strengthen Sabah’s position as a competitive destination for energy sector investments,” he said during the Commemoration of Sabah OGSE Vendors here recently.
Bacho said strengthening Sabah’s OGSE ecosystem is essential in ensuring Malaysia’s continued competitiveness in the regional and global energy sector.
Sabah Assistant Finance Minister Datuk Mohd Ishak Ayub, representing Sabah Deputy Chief Minister and State Finance Minister Datuk Seri Masidi Manjun, Petronas vice-president of Group Procurement Rashidah Alias and Petronas vice-president of Group Strategic Relations and Communications Norafizal Mat Saad were also present at the event.
Petronas and the Sabah state government also recognised Sabah-based OGSE vendors’ contribution in fostering a sustainable and competitive local industry ecosystem.
In 2025, 98 Sabah-based OGSE vendors were recognised for their capabilities and track record in securing contracts, reflecting steady growth since the signing of the Sabah Commercial Collaboration Agreement (CCA) in December 2021.
Of these, 47 vendors received recognition for the first time, highlighting expanding opportunities for local industry participation.
The number of contracts secured by Sabah vendors has also increased significantly from 133 in 2021 to 499 in 2025, reflecting growing industry depth and capability.
Bacho said Malaysia’s long-term energy strategy aims to sustain national production at two million barrels of oil equivalent per day (2 MMboe/d) to ensure long-term energy security.
“Reaching this ‘North Star’ depends on the strength of our delivery ecosystem. This is why a strong, capable and competitive OGSE ecosystem is so critical,” he said.
He added that Petronas continues to strengthen its Vendor Development Programme (VDP) to nurture local vendors and build competitive industry players capable of meeting national and global standards.
Petronas complements this effort through its Vendor Financing Programme (VFP), which supports vendors in strengthening financial resilience and scaling operations.
“Together, VDP and VFP form a comprehensive support system – building vendors that are technically capable, financially resilient and globally competitive.
“In doing this, we are ensuring that Sabah’s OGSE ecosystem continues to grow stronger, more diverse and future-ready,” he added.
Meanwhile, Masidi, in his speech read by Mohd Ishak, said the Sabah-Petronas partnership has evolved into a structured and impactful collaboration delivering tangible benefits to the state.
Since the signing of the CCA in December 2021, Sabah has progressed from participation to meaningful contract-holdership, equity ownership and significant value creation, he said.
He said this reflects Sabah’s commitment to achieving greater participation, revenue and influence in managing its natural resources and strengthening its oil and gas ecosystem.
Masidi said Sabah targets to achieve 60 per cent state participation in OGSE activities through contract-holdership, equity ownership and joint ventures, underscoring its ambition to play a leading role in the sector.
He also urged Sabah-based vendors to uphold high safety standards, quality and accountability, reiterating that participation is guided by objective, capability-based standards consistent with Petronas’ established requirements. — Bernama
Malay Mail – Money
