Calls for consolidation in O&G sector


If you want to buy IGL for 3 times its projected sales, be my guest.

Dateline 2016-03-26, Borneo Post:

A large chunk of major players in the oil and gas (O&G) industry have accepted the new norm of low oil prices whereby exuberance is no longer tolerable and are taking multiple initiatives to optimise their cost structures.

According to Hong Leong Investment Bank Bhd (HLIB Research) this comes amidst calls for further consolidation in the industry.

“To put it into perspective, there are 3,000 O&G companies registered in Malaysia while Norway, with similar production volume, has only about 700 registered companies, pointing to ample room for companies in Malaysia to consolidate,” it detailled in a report yesterday.

To put things in perspective, Petronas has launched Coral 2.0 initiative to save costs and improve efficiencies. Schlumberger, on the other hand, has looked at further optimisation in its business involving reduction of Non Performing Time (NPT) through widening scope of work on per staff basis.

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