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(Last updated: 10 Nov 2008)
Trends and opportunities
The market
Malaysia’s national oil and gas company, Petronas, as a state-owned enterprise has exclusive rights of ownership, exploration and production of Malaysia’s oil and gas reserves.
Currently, Petronas has 53 producing oil fields and several under development. Out of 183 gas fields discovered, 24 are currently online. Malaysia currently produces about 750,000 barrels of oil per day and 5 billion cubic feet of gas per day. It is also currently involved in oil production in 24 countries.
International petroleum companies that have production sharing contracts with Petronas in Malaysia include:
- Exxon Mobil Bhd
- Shell Bhd
- BP Malaysia Bhd
- Chevron
- Murpy Oil
- Nippon Oil
- Lundin Malaysia
- Mitsubishi
- Japex
- Newfield
- BHP Billiton Petroleum
- Talisman Energy
Work is continuing on the Peninsular Gas Utilisation (PGU) pipeline linking the Trans Thailand-Malaysia Gas Pipeline System, a joint development between Petronas and the Petroleum Authority of Thailand. This pipeline will enable transportation of gas from gas fields in Songkhla, Southern Thailand to the PGU system and brings closer the realisation of an ASEAN Gas Grid.
Additionally, there is a new project to link the gas line from Sabah to Sarawak, which is called the Sabah Sarawak Gas Pipeline Project (SGPP). This project once commence will turn Sabah into another gas production hub after Sarawak. The reported cost of the project is A$700 million.
Deep sea exploration have just commenced in Malaysia (2007) with Murphy Oil Corporation being the pioneer in Malaysia undertaking such project. With the new development in deep sea exploration, new technology has been introduced into oil and gas sector.
Opportunities
Opportunity areas for Australian suppliers in Malaysia’s oil and gas sector include:
- Inventory and loss control software and systems, support for installation, and commissioning/training of personnel in the use of these systems.
- Technology transfer projects for specific applications.
- Cost reduction technologies for oil and gas upstream activities.
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Tariffs, regulations and customs
Industry standards
The National Petroleum Policy (1975) aims at regulating the oil and gas industry to achieve the country's economic development needs. Petronas, under the direct purview of the Prime Minister, regulates all upstream activities while the Ministry of International Trade and Industry (MITI) and the Ministry of Domestic Trade and Consumer Affairs (MDTCA) are responsible for regulating all downstream activities. MITI is responsible for the issuance of licences for the processing and refining of petroleum and the manufacture of petrochemical products, while MDTCA issues licences for the marketing and distribution of petroleum products.
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Marketing your products and services
Market entry
Strategies for entering the Malaysian market vary according to the product or service being offered. Products can be directly exported to the end-customer or indirectly exported, through an agent or distributor.
Direct exports most commonly apply to the provision of services. This includes management, consulting and training programs. These exports are carried out directly through negotiations with end-customers.
For indirect exports, we believe that establishing a local presence is very important. This can be carried out in the following ways:
- Appoint an agent or distributor
- Form a joint venture partnership
- Form a short-term partnership (ie. a one or two year contract with opportunity to review the partnership at the end of each term)
- Form an ‘ad-hoc’ partnership (ie. different partners for different projects and products)
The most important factor is to ensure that the local distributor or agent has an appropriate license to supply to Petronas for the oil and gas sector. However, any new product or service introduced will still have to go through a stringent evaluation check before being included in the local company’s existing license.
For all foreign companies, it is essential to work with a local partner with appropriate industry background, marketing and technical support capabilities. An important aspect of any working arrangement is the transfer of technology by the foreign company to the local partner. This is viewed as a key element, especially for major government projects.
International tenders are generally open to pre-qualified, registered suppliers and preference is usually given to foreign suppliers with local distributors or agents. To successfully bid for a tender, Australian companies are advised to team up with a local partner.
Malaysian companies are very open and receptive to new products and services. The following suggestions are for Australian companies who are interested in marketing their products and services:
- Be prepared to visit the Malaysian oil and gas sector regularly (at least two to three times a year)
- Follow up on previous visits (through telephone, email or faxes)
- Learn about the cultural issues in Malaysia
- Prepare information packs about your company, products and services offered
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Links and industry contacts
Oil and gas–related resources
Information for the oil industry – www.oilonline.com
ExxonMobil – www.exxonmobil.com
Shell Bhd – www.shell.com.my
Petroliam Nasional Berhad (Petronas) – www.petronas.com
Tower 1, Petronas Twin Towers
Kuala Lumpur City Centre
50088 Kuala Lumpur
Malaysia
Tel: +60 3 206 5000
Fax: +60 3 206 5050
Government, business and trade resources for Malaysia
Ministry of Energy, Communications and Multimedia – www.ktkm.gov.my
1st Floor, Wisma Damansara
Jalan Semantan
50668 Kuala Lumpur
Malaysia
Tel: +60 3 257 5000
Fax: +60 3 253 3485
Department of Electricity and Gas Malaysia
Tingkat 15-20, Menara Dato’ Onn
Pusat Dagangan Dunia Putra
Jalan Tun Ismail
50480 Kuala Lumpur
Tel: +60 3 4045 5445
Fax: +60 3 4045 6654
Ministry of International Trade and Industry – www.miti.gov.my
Block 10, Government Offices Complex
Jalan Duta
50662 Kuala Lumpur
Malaysia
Tel: +60 3 6201 0033
Fax: +60 3 6203 1303
Ministry of Domestic Trade and Consumer Affairs – www.kpdnhq.gov.my/homepage/english/mainDt.html
Tingkat 27-33, Menara Dayabumi
Jalan Sultan Hishamuddin
50632 Kuala Lumpur
Malaysia
Tel: +60 3 2274 8761
Fax: +60 3 2274 5260
Royal Customs and Excise Department, Malaysia – www.customs.gov.my
Blok 11, Kompleks Pejabat-Pejabat Kerajaan
Jalan Duta
50596 Kuala Lumpur
Malaysia
Tel: +60 3 6201 6088 or 6200 2223
Fax: +60 3 6201 2548
Email: kastam@hq.rced.gov.my
Media
Tenaga Nasional Berhad (TNB) – www.tnb.com.my
International Oil News – www.petrochemical-news.com |
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Contact details
The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.
Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.
Austrade:
- Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
- Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
- Administers the Export Market Development Grants scheme.
- Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
- Provides advice to the Australian Government on its trade and investment development activities.
- Delivers consular, passport and other government services in designated overseas locations.
A list of Austrade offices (in alphabetical order of country) is available.
More information
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au |
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