KUCHING, April 19: Chief Minister Datuk Patinggi Abang Johari Tun Openg is optimistic that the global prices of crude oil would eventually stablise in the near future.
In his speech during the land lease agreement signing ceremony between Bintulu Supply Base Sdn Bhd and Bintulu Port Authority at a leading hotel here this morning, he said earlier this year the price for Brent crude oil breached they key psychological mark of USD60 per barrel.
Many industry players were also optimistic on the direction of oil prices, expecting this year’s prices to stand at between USD60 to USD65 per barrel, he added.
Abang Johari further explained that the steady global inventory drawdown as seen today was mainly due to strong oil consumption demand, coupled with OPEC’s adherence to production cuts and extension of the production cuts until the end of 2018.
He believed that this upward trend was a promising signal as far as market rebalancing was concerned and would continue to support a positive oil price trajectory hereon, provided the controls on the supply side are complied with by the oil producing nations.
“On our shore, I believe, capex budgets should be expected to still be tough this year but may possibly accelerate next year, in 2019 as the Brent crude oil price averages to the USD65 per barrel mark. My contention here is based on recent reports, where cost optimisation remains a top priority of Petronas despite the recent recovery in the price of crude oil.
“That being said, despite improving tenders and awards in 2017, I see signs of recovery along the oil and gas value chain in 2018 for Malaysian offshore activities. I therefore call upon our Sarawak-based oil and gas service providers to capitalise on this positive trend,” said Abang Johari.
He said Sarawak oil and gas players with exposure to exploration and development activities would offer the greatest operational leverage when the capex cycle improves at this nascent stage of oil and gas recovery.
Abang Johari also expected that local project flows would still remain challenging except for a few players like the marine vessels, offshore installations and fabrication sector of the industry. — DayakDaily