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Malaysia can play a significant role in providing engineering services to the countries in the Middle East. (Thestar.com Photo)
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Malaysia has the potential to become a regional hub for the oil and gas (O&G) industry, especially in engineering services, according to The Association of Malaysian Oil and Gas Engineering Consultants (Mogec).
A Mogec spokesman said Malaysia was fast becoming a source for various O&G-related services, in particular engineering designs.
“We have the potential to become a regional hub to service the O&G sector and other businesses related to this sector,“ he told StarBiz.
He said Malaysia was now able to provide a host of services, from front-end engineering design to decommissioning, covering the upstream and downstream segments.
“We can provide engineering design services, project management, construction supervision, quality assurance and control, contracting and procurement,“ he said.
The spokesman added that if there were projects worldwide, Mogec had the design and engineering capability to do the work at a competitive price.
“Our standards are at par with foreign O&G engineers. In terms of costs, engineering services in Malaysia are cheaper compared with those offered by our European and American counterparts,“ he said.
He said the costs of Malaysia’s engineering expertise was somewhere in the middle among the players globally, according to thestar.com.
He added that currently, India was the front-runner due to its internal cost structure that provided it with a competitive edge.
“Although there are several countries with lower costs for O&G-related expertise in this region, many international clients still prefer Malaysia due to our higher quality engineering services and up-to-date technological know-how.
“When we win a job, for example in Indonesia, we try as much as possible to do the engineering services in Malaysia. Once we have designed a particular plant here, we use it and commence construction in the client’s country,“ he said.
However, he noted that it was not so straightforward in some cases, as the government in a given country would want their local engineers involved in the engineering process.
“In such a case, work is split--some work is done in Malaysia with the remainder in the client’s respective country,“ he said.
Currently, Mogec has offices providing a range of engineering services in Jakarta, Indonesia.
The Mogec spokesman said with stronger collaboration between local players, coupled with greater efforts by the government to promote the O&G sector, Malaysia could become a leading hub for O&G engineering in the region.
He suggested that engineering firms merge to become larger players so that they could win bigger contracts.
“O&G clients with large contracts are in favor of big engineering companies who are perceived as financially stable, much safer and more efficient,“ he noted.
However, he assured that Mogec members were competent to handle most of the large contracts.
He said Mogec was working closely with other professional bodies, such as the Institute of Engineers Malaysia and the Offshore Structures Fabricators Association Malaysia, to further develop the industry.
He said Mogec’s pre-budget wish list would be to see greater funds for research and development as well as tax incentives, especially for industry players who embraced new technology.
According to the Mogec spokesman, Malaysia is already a regional hub for the O&G sector in many ways.
He noted that Mogec members were taking design works outside of the Asean region to places such as India, the Middle East, China and West Africa and applying their engineering expertise to these markets, including Central Asia.
Mogec members’ main clients include Petronas Carigali Sdn Bhd, ExxonMobil Corp, Royal Dutch Shell Plc, Talisman, and Murphy Oil.
A senior O&G consultant specializing in exploration, in particular deep-sea operations, said Malaysia, in general, had adequate engineering expertise for most of the O&G works. “However, in certain areas, such as deep sea exploration and operations, Malaysia is still in the learning process.
“Some areas of engineering services require a long time to develop the necessary skills. There’s no replacement for experience and this takes time,“ said the consultant.