Petronas Leads 25 Pacs On Structural Change In Malaysia's O&G Upstream Business

KUALA LUMPUR, June 2 (Bernama) -- Malaysian oil and gas company, Petronas is leading an industry-wide effort involving 25 petroleum arrangement contractors (PACs) to embrace a structural change in the oil and gas (O&G) upstream business environment in Malaysia. Chairman Sidek Hassan said the initiative, namely the Cost Reduction Alliance (Coral 2.0), is aimed at inculcating a cost-conscious mindset among industry players. "This is not a mere cost cutting exercise. Beyond that, it is about ensuring the robustness and sustainability of our business," he said at the opening of 15th Asian Oil, Gas and Petrochemical Engineering Exhibition (OGA 2015) here Tuesday. He said while industry players could not predict the certainty of oil price in the future, they can be prepared to weather fluctuations by continuously innovating. According to Sidek, the weak oil price provided an opportunity for industry players to collaborate more closely on creative ways to reduce the cost structure and continuously innovate to systematically make it more efficient, safe and green. "Petronas has announced capital expenditure cuts of 15 per cent and for operating expenditure, 25 per cent. But, what we can achieve individually, we can achieve even more as an alliance. The sum, will definitely be greater than its parts," he added. On the global O&G development, he said the industry output was growing at a rapid pace driven by the shale revolution that has transformed the United States (US) oil and gas market. He said the US was currently producing around 9.0 million barrels per day, an 80 per cent growth from the 5.0 million barrels produced in 2008. In turn, global oil demand is expected to increase by 1.1 million barrels per day this year. Meanwhile, the three-day exhibition has attracted over 2,000 exhibitors from more than 50 countries, showcasing the latest in technology, equipment and machinery in the oil, gas and petrochemical industries. The exhibition is also expected to attract 23,000 trade visitors. --BERNAMA