Budget 2020 : A Boon for OGSE Technology SMEs
KUALA LUMPUR, October 15—Budget 2020’s slew of incentives in research and development (R&D), market access and capacity building will help boost confidence in technology investments by small and medium enterprises (SMEs) in the country’s oil and gas services and equipment sector.
“The incentives announced in Budget 2020 will surely fast track Malaysia’s OGSE industry into a technology-focused future. SMEs account over 80% of the country’s OGSE sector and firms that leverage on the Budget 2020 incentives are set to be at the forefront of OGSE technology development,” said Mohd Yazid Ja’afar, deputy chief executive officer at Malaysia Petroleum Resources Corporation.
He added that the R&D push by the Government comes at a time when global oil and gas industry is bracing for a bearish year in 2020, as supply and demand balances show persistent surpluses against a slowing global economy and a looming deepening trade war, and as oil majors continue to demand for cost- effective and low-carbon technologies.
As one of the key contributor to Malaysia’s GDP, OGSE is a key driver to Malaysia's ambition to becoming a competitive and inclusive high-income nation. The government’s R&D push will further strengthen the growth of the OGSE industry.
“Initiatives such as the one-stop Innovation Office will further strengthen thecurrent industry drive to harness technology. The Innovation office could potentially serve as an effective avenue for local OGSE companies to not only build a competitive edge, but to grow the R&D DNA that will enable them meet the future requirements of the oil and gas industry,” Yazid said.
He further added that the 5.3% increase in budget allocation for the Bumiputera Agenda to RM8 billion in 2020 represents an opportunity for growth for the Bumiputera-owned OGSE firms in Malaysia.
“With Bumiputera firms making up 70% of the OGSE industry, the push for capacity- building programmes for Bumiputera firms will ensure OGSE SMEs and Bumiputera firms continue to enhance their global competitiveness to meet the needs of the oil and gas value chain,” he said