Help Sabah O&G contractors grow, Upko leader tells Petronas

Sabah produces almost 50% of the country’s petroleum output, says Upko Youth chief Felix Saang. (Bernama pic)

KOTA KINABALU: Upko Youth chief Felix Saang has urged national oil company Petronas to give bigger opportunities to Sabah oil and gas contractors whom he says are given only small-time jobs compared to established players.

He said local companies should receive more priority as they are newcomers and unable to compete with other recognised companies from Peninsular Malaysia and Sarawak.

He added that these contractors need assistance until they are able to compete on a level playing field.

“I was made to understand that many Sabahan oil and gas contractors are in limbo now as they are trapped in a catch-22 situation whereby they need experience and size before being able to bid for contracts while at the same time, they need contracts in order to gain experience and grow.

“I understand that Petronas is acting on its business interests but as a government-linked corporation entrusted with the nation’s mineral wealth, it should be more considerate and take up the responsibility of helping the locals where they operate,” Saang said.

Speaking to reporters after the Upko Youth exco meeting here, he said the jobs awarded to Sabah contractors are limited to contracts for the supply of workers, catering and other subcontracting works. Bigger contracts are given to outsiders, he claimed.

He said this is unfair to local contractors whose involvement in the industry is minimal despite the fact that Petronas operates in Sabah waters.

Upko Youth chief Felix Saang.

“They have become mere bystanders, watching helplessly as the economic pie is taken by others,” he said.

“If it continues this way, how will our local contractors grow in terms of economy, scale and expertise which would allow them to bid for main contracts from Petronas and other upstream players such as Shell and Repsol?”

Being subcontractors, Saang said, Sabah companies are at the mercy of main contractors who, according to him, sometimes delay payments and hinder the transfer of technology to local contractors.

“In the New Malaysia, Petronas should do away with the old practice of alienating the locals in its previous projects in Sabah,” he said.

He added that Sabahans should be the main beneficiaries of the state’s wealth including oil and gas, where Sabah produces almost 50% of the country’s petroleum output.

He urged the state government to negotiate with Petronas to demand that the rights of Sabahans be respected and for the company to give priority to local companies and manpower.

Saang said he was told that Petronas and its production sharing contract partners spend around RM5 billion annually to run and maintain their operations in Sabah, an amount bigger than the state’s annual budget.

“However, such big expenditure has not benefited Sabahans significantly. Jobs are still scarce and the lucrative oil and gas job sector is dominated by non-Sabahans.”