Local Companies Get Contracts in Oil & Gas Industry

The 100 percent increase in contracts in the oil and gas services and equipment (OGSE) sector in 2025 will land in the hands of local companies. Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said that the State Government in collaboration with PETRONAS and industry partners will comply with the local content target. For employment, the target is 100 per cent of non-technical roles and at least 80 per cent of technical roles must be filled by Sabahans in the OGSE sector.

“These targets reflect our firm commitment to strengthening local participation and building a resilient, homegrown energy ecosystem.” Hajiji said on 3 July 2025 at the 12th Sabah Oil, Gas and Energy Conference and Exhibition at the Sabah International Convention Centre, Kota Kinabalu. “Our role must extend beyond mere oil production. Sabah must become a centre of excellence for OGSE innovation and sustainable energy practices and a hub where investment, talent, and technology converge to create long-term value for local Sabahans.” Datuk Phoong Jin Zhe, Minister of Industrial Development and Entrepreneurship, delivered the CM’s speech.

The total contract awarded to Sabahan companies in 2021 and 2024 for local oil and gas services jobs was RM341 million and RM2 billion respectively. Hajiji said that Sabah’s oil and gas industry is a significant pillar of the state’s economic growth and the industry continues to play a pivotal role to that of Malaysia's economy, contributing 40 per cent of the country's oil production and 20 per cent of tha nation’s gas output. The State Government has begun securing equity in key upstream and downstream assets, including the Samarang PSC and the SAMUR petrochemical plant; and securing interests in exploration blocks SB403, SB409, SB306A and SB306B.

Sabah Energy Corporation is becoming one of Malaysia’s largest domestic suppliers and transporters of natural gas, following its successful takeover of PETRONAS’ onshore gas contracts in Sabah. The Commercial Collaboration Agreement (CCA) signed in December 2021 with PETRONAS has created initiatives for the locals and the State Government has ensured that these initiatives include clauses for mandatory local Sabahan partnerships.

“Our vision is to build a pipeline of OGSE opportunities that extends beyond short term contracts. We want to promote knowledge transfer, technology exchange, and joint ventures that propel our local players into regional players,” Hajiji said. “We must build a resilient, innovative, and sustainable OGSE ecosystem to ensure that Sabah remains as a key energy player in the oil, gas, and energy industry.”

Datuk Phoong Jin Zhe, Minister of Industrial Development and Entrepreneurship, delivered the CM’s speech.