Expert: Price pick-up will spur consolidation

Dateline 2017-02-01, NST:

The bottoming out of oil prices will give impetus to the consolidation of upstream oil and gas (O&G) service providers in Malaysia, said an industry specialist. Frost & Sullivan Asia Pacific vice-president for energy and environment Ravi Krishnaswamy said companies are getting more confident as crude oil prices start to pick up, making mergers and acquisitions (M&As) a more viable option. Smaller companies find it more difficult to survive, especially where digital technology is concerned, as they are not able to invest and grow and meet the global criteria, he added. “The best thing to do for these smaller players is to look for synergies with other bigger players or get acquired as this would be a more resilient approach. “Although Petroliam Nasional Bhd (Petronas) has been very open about the industry’s need to merge and consolidate, it cannot force these companies to do so, hence the need to encourage such activities instead,” Ravi told NST Business recently.

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