NDUSTRY players expect 2011 to be a busy year for the oil and gas industry, given the various new incentives laid out by the government.
An industry player pointed out that in 2010, the industry was not what the players had expected as not many contracts were awarded although the concerned companies went through a lot of bidding exercises.
"We are hoping that the award will be implemented and executed in 2011," the industry player, who holds a senior position in the oil and gas-related supporting services company told Business Times.
Based on the current outlook, the industry player said 2011 will definitely be a busy year, especially for the enhance oil recovery programme that Petronas is pursuing.
"But for new development, it all depends on the oil price and capital expenditure," the industry player said.
Given that the industry has consolidated in the past two years and the fact that oil prices are creeping higher, the industry player said the related companies expect both global and local oil and gas activities to gain momentum and more exploration, development and production activities are expected to be spearheaded by Petronas and the other oil majors.
Petra Perdana Bhd managing director Shamsul Saad, who shared the same sentiment, said the company is very much optimistic of the industry but remains cautiously pragmatic in its strategies for 2011.
"Regardless, our own assessments of the exploration and production programmes, both within the greenfield and brownfield sectors throughout the region have given us strong confidence that a resurgence within the industry is already imminent. We believe that Malaysia will lead the way," he said.
And indeed, the new tax schemes for the oil and gas sector as announced by the government in November would definitely spur more exploration and production activities, particularly in marginal fields within the Malaysian water as well as increase the effectiveness of the enhance oil recovery (EOR) programmes by Petronas and other oil majors.
According to Petronas, the government's new incentives for the oil and gas sector could spur the production of 1.7 billion barrels of oil, equivalent from 25 marginal fields, in the next 15 to 20 years. It (incentives) also entails an investment of about RM70 billion and RM75 billion over this period.
Although there has yet to be any contract services awarded under the new incentives, there are already several oil and gas supporting services-related companies, which have expressed their interest to participate in the exploration and production of the marginal fields.
Kencana Petroleum Bhd, for example, has conveyed its interest to explore and produce oil from marginal fields, saying that it has the financial and technical capabilities to undertake such projects.
"We are keen to look at new areas of business. If an opportunity arises, we have the financial capability. We have technical capability and we are probably meant to put ourselves in that position," group chief executive officer Datuk Mokhzani Mahathir had said.
For Petra Perdana, Shamsul said the company is always on the look-out for opportunities to grow within the oil and gas industry.
"We have the credentials and the track record to go along with being the first-movers in practically every area that we have embarked on.
"We hope to do so. And we believe the industry and especially the stakeholders know that this is to its advantage," he said.