<article><p class="lead">Malaysia is seeking to steer its oil and gas sector away from uncertainty created by the Covid-19 pandemic, unveiling a 10-year industry plan aimed at thriving in a lower oil price environment and capitalising on the global energy transition. </p><p>The national oil and gas services and equipment (OGSE) industry blueprint 2021-30, launched this week, comes after a government forecast of a <a href="https://direct.argusmedia.com/newsandanalysis/article/2159932">near 25pc fall in oil and gas revenues</a> to 37.8bn ringgit ($9.2bn) this year as the pandemic continues to batter crude prices. State-owned oil and gas firm Petronas started 2020 with planned capital expenditure (capex) of 50bn ringgit, which it later <a href="https://direct.argusmedia.com/newsandanalysis/article/2191368">slashed to 33.4bn ringgit</a> because of the pandemic. </p><p>The 10-year plan outlines key goals in terms of increasing the OGSE sector's export potential, diversification into adjacent areas such as renewable energy and industry consolidation. Details are scarce but the plan mentions exports grants and tax breaks, support for mergers, as well as "funding for emerging adjacent ventures into areas such as new energy".</p><p>Among the blueprint's targets are for the OGSE sector to contribute 40bn-50bn ringgit to Malaysia's GDP by 2030 from around 20bn-40bn ringgit currently. It is also aiming for OGSE companies to derive 25pc of total revenue from outside oil and gas such as renewables by 2030, without indicating current levels. </p><p>Malaysia's crude and condensate production was lower at 545,000 b/d in 2020 compared with 608,000 b/d in 2019, <i>Argus Consulting</i> estimates. </p><p>"Recent oil price crises due to a destruction in demand as the Covid-19 pandemic grounded air travel and governments imposed lockdowns demonstrate a critical need for OGSE companies to build financial resilience," the blueprint said. "The entire oil and gas industry has risen to the urgent call for energy transition… moving towards a more sustainable model that is focused on renewables and less dependent on fossil fuels."</p><p>The blueprint highlights participation from ministries and government agencies including Petronas, which last year announced a target to <a href="https://direct.argusmedia.com/newsandanalysis/article/2156145">achieve net-zero emissions by 2050</a>. </p><p>"This will see Petronas not only reducing its carbon footprint operationally but also investing more in renewable energy," it said, signalling government support for the national oil firm's <a href="https://direct.argusmedia.com/newsandanalysis/article/2193503">green spending plans</a>. Petronas plans to allocate 3.6bn-4bn ringgit/yr, or 9pc, of its 40bn-45bn ringgit/yr capex over the next five years to renewable energy. The firm is a major LNG exporter and produces around 1.8mn b/d of oil equivalent. </p><p class="bylines">By Reena Nathan</p></article>
