Sabah companies unable to compete with GLCs

The government should decide on who will lead the Sabah oil and gas industry and ensure the local industry sees growth.

KOTA KINABALU: The Sabah Oil and Gas Contractors Association has urged the all-powerful government-linked companies (GLCs) to assist local contractors and not compete with them in securing oil and gas contracts.

“Well established GLCs should be the ones supporting the local companies and ensuring that they can participate more actively in this rapidly growing industry,” its president Iskandar Abdul Malik said yesterday.

He was speaking at the sideline of a town hall briefing session on the “International Gas Union Malaysian presidency and world gas conference 2012 Kuala Lumpur” at Wisma Bandaraya here.

According to Iskandar, the situation in Sabah’s oil and gas industry is chaotic and disorganised as no one seemed to assume the leading role to ensure that locals are benefiting from it.

He added that instead of everyone jumping in and competing with each other, someone should take the lead and help distribute jobs among local companies.

“Everybody is going in with even GLCs like Sabah Energy Corporation, Sedco, and Yayasan Sabah competing with one another and until today we still do not know who is leading the industry.

“How can we compete with these GLCs? They should be the one supporting us, but they are not supporting us properly.

“The government should do something about this,” he said when speaking of the lack of direction by the state oil and gas industry.

He suggested that while Sabah’s GLCs could participate directly in gas and oil projects, they should also act as mediators for smaller companies by securing jobs to be distributed among local contractors.

He pointed out that without a leading local company acting as an anchor, local contractors were facing difficulties competing with outsiders, who secure most of the jobs with assistance from bigger companies like Naim and Samsung.

Sabah has capable agencies

Iskandar said Sarawak-based Naim and South Korean company Samsung were just “Ali Baba companies”, which secured and then sub-contracted jobs to other companies from their respective state and country first.

“We want one state GLC to lead the state oil and gas industry… we don’t want Naim and Samsung, we want our own state GLC.

“The government should focus on who leads the state oil and gas industry… because if we are all split, there will be divide and rule,” he said.

Sabah, he added, has highly capable agencies that can be appointed to take up the lead role, particularly the Sabah Energy Corporation (SEC).

However, he said SEC, despite having the resources and ability, was not given the chance to undertake the same jobs given to Naim and Samsung.

Earlier, Iskandar said his association would take part in the World Gas Conference 2012 in Kuala Lumpur.

He said the conference would be a great opportunity for the association to present its views on what is needed as well as be a bellwether of local sentiment on the treatment being given to Sabah in the development of the gas and oil industry in the state.

He said that the Sabah business community was doing its best to support the state government’s efforts to develop the industry.

However, he said it was important that state and federal leaders understand the local situation where companies from outside the state were sub-contracting to outside contractors.

He added that this would not lead to any transfer of technology to the local people.

He said based on the current situation, the development of the oil and gas industry did not benefit the local people as they merely became sub-contractors and “slaves” to foreign companies.