KUALA LUMPUR, Nov 6 (Bernama) - Malaysia’s Budget 2021 establishes a balance between protecting livelihoods and revitalising the economy, in the wake of the COVID-19 pandemic, industry development agency for the oil and gas services and equipment (OGSE) industry says.  

“The Government has moved decisively in Budget 2021 and helped carve a path towards recovery for many industries that were impacted by the COVID-19 pandemic, including the OGSE industry,” Mohd Yazid Ja’afar, deputy chief executive officer at Malaysia Petroleum Resources Corporation said.  

Tabled by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, the Budget 2021, themed “Teguh Kita, Menang Bersama”, also demonstrates the Government’s commitment towards sustainable living and a greater emphasis on sustainable socio-economic programmes. 

Yazid adds that the range of different measures to help businesses, particularly the Skim Jaminan Prihatin Danajamin, which addresses the current obstacles faced by Malaysian companies is critical for our companies to grow again if the national and global economies were to recover in the medium and long term. 

One of the initiatives that should be lauded is the Bon Kelestarian Utama. “Local OGSE companies that subscribe to the Bon Kelestarian Utama could utilise them for export activities and moving forward, give them the much-needed leverage to secure larger contracts overseas,” he said. 

The following are comments from MPRC on the different areas covered in Budget 2021:

Sustainable Financing 
The message from the investing community for a well-articulated environmental, social and governance (ESG) investing plan towards businesses is gaining momentum and will continue to grow with the Green Technology Financing Scheme 3.0 (with a fund size of RM2 billion until 2022) that was announced in the Budget. 

This could see ESG goals and programmes emerging as a significant area of focus for Malaysian OGSE companies. We believe that OGSE companies that respond to and adopt ESG goals are better placed to navigate the energy transition. 

Investment Destination
Malaysia needs to continue to remain an attractive destination to investors as the country sets a path towards sustained economic recovery and growth. As such we laud the Government’s move to extend the special tax rate to selected manufacturing companies to Dec 31, 2022. 

Technology Development
A number of significant funding and alternative funding measures announced in Budget 2021 will come as a welcome news to OGSE companies involved in technology development, such as the High Technology Fund (Dana Teknologi Tinggi) of RM500 million by BNM and tax exemptions to commercialise R&D activities. We are hopeful this initiative will catalyse OGSE companies to further develop their technological solutions, increase operational efficiency whilst also keeping costs low. 

Reskilling and Upskilling Talents
MPRC urges semi-skilled oil and gas workers and technicians such as (welders, riggers, offshore workers) to utilise the RM150 million allocated for upskilling under KPT-PACE (Kementerian Pengajian Tinggi-Persijilan Profesional), as well as RM100 million allocated by HRDF. This will provide a much-needed breathing space for retrenched and displaced workers. For the industry, this will also help ensure skilled and experienced workers are maintained in the industry.  

Establishment of National Employment Council  
MPRC’s recent COVID-19 survey of the OGSE sector anticipates around a retrenchment rate of 30% from the industry’s current workforce of 60,000 individuals. Thus, we hope that the OGSE sector will be monitored and supported by the National Employment Council (Majlis Pekerjaan Negara) 

Allocation of RM35 million for Trade and Investment Promotion 
Whilst trade missions are expected to be affected by travel restrictions due to COVID-19, MPRC is pleased to note that trade missions will continue to be funded by the Government. As countries become more inward-looking, any ventures into new markets are to carry on with export programs. Thus, this initiative will continue to benefit local OGSE companies and showcase their products in overseas market.

About MPRC

Formed in April 2011 and currently an agency under the Economic Planning Unit, Prime Minister’s Department, Malaysia Petroleum Resources Corporation (MPRC) provides recommendations to the Government to encourage competitiveness and nurture long-term resilience among Malaysian OGSE players. MPRC also implements industry development initiatives covering technology and innovation, human capital development, market access and internationalisation, and access to finance facilitation.

SOURCE: Malaysia Petroleum Resources Corporation (MPRC)

FOR MORE INFORMATION, PLEASE CONTACT: 
Name: Lim Shie-Lynn
Malaysia Petroleum Resources Corporation
Tel:  +603 2858 8569 / +6012 304 3389
Email: lynn.lim@mprc.gov.my

--BERNAMA