Malaysia's OGSE Industry: Navigating the Energy Transition

Malaysia's oil and gas services and equipment (OGSE) industry is at a critical turning point as the global energy landscape shifts, demanding it to overcome the challenges of competitiveness and agility to remain sustainable, despite contributing a significant 5-8% to the national GDP.

PETRONAS's senior general manager, Mohd Razali Kamin, stressed at the Oil and Gas Asia (OGA) 2025 conference that in order to stay resilient, the industry must embrace digitalisation, innovate, and reinforce its technical capabilities.

A recent review of the National OGSE Industry Blueprint revealed that 85% of companies have not published sustainability reports, and 45% lack R&D resources, putting them at a disadvantage.

To address these shortcomings, PETRONAS has introduced several initiatives, including the Vendor Development Programme (VDP), the Vendor Financing Programme (VFP), and the new PETRONAS Supplier Support Programme (PSSP) to assist vendors with ESG practices. Industry experts insist that organisations must actively drive their own change, even though these initiatives provide the means for growth.

The industry aims to achieve ambitious targets by 2030, while sustaining its RM50 billion GDP contribution and generating 25% of its income from lower-carbon sectors like carbon capture, utilization, and storage (CCUS) and renewables. According to leaders, this transformation is no longer optional but a pressing need that requires broad collaboration across the entire ecosystem.

85 percent OGSE companies without published sustainability reports plus 45 percent without R&D resources combined with 25 percent-lower-carbon-revenue target by 2030 captures the substantive gap between current OGSE positioning and transition-ready capability. PETRONAS Vendor Development, Financing and Supplier Support programmes address individual capability elements but require sustained vendor-side investment to deliver at scale.

The RM50 billion GDP contribution combined with CCUS and renewables diversification target is analytically important. Successful OGSE-sector transition preserves substantial industrial-employment-and-value contribution while shifting revenue mix toward transition-consistent activities; failed transition leads to sector contraction that broader economy cannot easily absorb.

For OGSE companies, oil-and-gas operators, financial institutions with Malaysian OGSE portfolio exposure and their sustainability advisors, Cognitud's energy transition, sustainability due diligence and supply chain and operations teams help clients evaluate PETRONAS-vendor-programme-linked opportunities, structure long-term commercial arrangements aligned with lower-carbon-revenue diversification priorities, and prepare disclosures aligned with Bursa Malaysia, ISSB and jurisdictional OGSE-transition frameworks.