Sabah Formulates Roadmap for Oil and Gas Industry

Sabah is formulating a medium-term plan for the Oil and Gas Services and Equipment OGSE industry. The government is assessing feedback from all stakeholders including national oil company, PETRONAS, and operators, contractors, vendors, industry associations, financial institutions, and training providers. Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said that the five-year Sabah Oil and Gas Services and Equipment (OGSE) Roadmap (2026-2030) will be formulated for sustainability.

“The wealth generated from our resources creates stronger local companies, better employment opportunities, deeper technical capabilities, and wider economic spillovers across the State. The roadmap must be practical, industry-driven, and outcome-oriented. It must address the real constraints faced by local companies and provide clear pathways for growth,” Hajiji said at the inaugural OGSE Conference and Exhibition 2026 at the Sabah International Convention Centre (SICC), Kota Kinabalu on 4 June 2026.

Since the first significant discovery of oil in Sabah in 1971, Sabah has contributed 40 per cent of the country’s crude oil and approximately 20 per cent of its natural gas production. Hajiji said that Sabah is no longer just extracting and supplying raw resources, but the State is involved in equity, execution, and local ownership. The OGSE roadmap will focus on three areas:
• Access to Capital: Setting up reliable credit lines and specialised working capital options so local vendors can seek financing for capital-intensive offshore projects.
• Technical Upgrading: Preparing local vendors for complex engineering scopes, particularly in asset integrity and major development activities in Sabah.
• Talent Matching: Connecting high-value technical jobs directly with Sabahan youths, enhancing local content development.

Sabah is targeting 60 per cent contract ownership for local OGSE vendors for 2026, following the successful implementation of the Commercial Collaboration Agreement (CCA) between the State Government and PETRONAS in December 2021 which saw the number of active contracts secured by local Sabahan vendors grew from 133 contracts in 2021 to 499 active contracts in 2026. Hajiji said that local Sabah companies must move beyond low-margin subcontracting and become main contractors, licence holders, technology adopters and long-term value creators which will eventually foster inclusive growth and support the State’s economic blueprint – the Sabah Maju Jaya 2.0’s goals - of higher productivity and shared prosperity. Sabah welcome international operators, major national players and established service providers to be important partners in the state’s growth, Hajiji added. Datuk Seri Panglima Masidi Manjun, Deputy Chief Minister II / Minister of Finance, delivered the CM’s speech.