KOTA KINABALU August 19, 2011: Government-linked companies (GLCs) should help local contractors, not compete with them in securing oil and gas contracts, said the Sabah Oil and Gas Contractors Association (SOGCA).
“Well-established GLCs should be the ones supporting the local companies and ensure that they can participate more actively in this rapidly growing industry,” said its president, Datuk Iskandar Abdul Malik.
According to Iskandar, the situation in Sabah’s oil and gas industry is rather chaotic and disorganized as no one seemed to assume the leading role ensuring that locals are benefiting from it.
Instead of everyone jumping in and competing with each other, he said someone should take the lead and help distribute jobs among local companies.
“Everybody is going in with even GLCs like Sabah Energy Corporation, Sedco, Yayasan Sabah and so on, competing with one another and until today we still do not know who is leading the industry.
“But how can we compete with these government-linked companies? They should be the ones supporting us, but they are not supporting us properly. The government should do something about this,” said Iskandar, adding that there was also no clear direction as to where the state oil and gas industry was heading.
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 secured most of the jobs with assistance from bigger companies.
He said the bigger firms were just “Ali Baba companies”, who secured and sub-contracted jobs to other companies from their respective state and country first.
“We want one state government-linked company to lead the state oil and gas industry.
“The government should focus on who will lead the state oil and gas industry … because if we are all split here and there, you know what will happen, there will be divide and rule,” he said.
Sabah, he added, already has highly capable agencies that can be appointed to take the role, in particular the Sabah Energy Corporation (SEC).
However, he said SEC, despite having the resources and ability, was not given the chance to do the jobs similar to that given to other bigger companies.
Earlier, Iskandar said SOGCA would take part in the World Gas Conference 2012 in Kuala Lumpur.
He said the conference would provide a great opportunity for SOGCA to present its view on what was needed and required, as well as the local sentiments on the treatment being given to Sabah in the development of the gas and oil industry in the State.
He stressed that the business community in Sabah highly supported the state government’s effort to develop the industry.
However, he said it was important that state and federal leaders understand that what is happening now, where outside companies giving out sub-contracts to outside contractors, would not lead to any transfer of technology to the local people.
Based on the current situation, he said the development of the oil and gas industry would not truly benefit the local people as they become merely sub-contractors and “slaves” to foreign companies.