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ETP ANNUAL REPORT 2011
EPP 6
Attracting Multinational Companies
to Bring a Sizeable Share of their Global
Operations to Malaysia
Malaysia aims to attract 10 to 20 major
international companies in the Oil
Field Services and Equipment (OFSE)
industry to bring approximately 10 per
cent of their business operations to
Malaysia. This translates to around 40
per cent of their regional activities and
would mean positioning Malaysia as a
cost-competitive base for engineering,
procurement and construction as well as
a strategic base for installation activities
in the Asia-Pacific region.
In April 2011 the Malaysia Petroleum
Resources Corporation (MPRC) was
established under the Prime Minister’s
Department. Its main objective is to
make Malaysia an oil and gas hub by
2017. The organisation will facilitate
cross-border investments and assist
Malaysian oil and gas companies
through the identification of suitable
markets and opportunities abroad.
MPRC’s Board of Directors consists of
representatives from PEMANDU, Malaysia
Industrial Development Corporation
(MIDA) and PETRONAS amongst others.
Achievements
MPRC and Labuan Financial Services
Authority (LFSA) have recently announced
the Global Incentives For Trading (GIFT)
programme. The GIFT programme is
established to encourage global petroleum
trading companies to use Malaysia as a
platform to enter the Asia Pacific market.
To date, five companies namely
PETRONAS, Dialog Group Bhd, YTL Power
International Bhd, UK-based BB Energy
and Rotterdam group, Vitol Trading, have
signed up for this programme and were
awarded a trading license each.
The key incentives offered are:
• Flat corporate tax rate of three per cent
of chargeable income
• 100 per cent exemption on director
fees paid to non-Malaysian director
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Malaysia can be positioned as a cost-competitive and strategic base for installation activities in the AP region
• 50 per cent exemption on gross
employment income for non-Malaysian
professional traders and others in
managerial capacity of the Labuan
International Trading Companies.
In July 2011, Schlumberger inaugurated
the WesternGeco Penang Product Centre
(WPPC) dedicated to the manufacturing
and support of State-of-the-Art marine
and land seismic equipment. By the end of
2012, the WPPC will employ approximately
300 people, combining local talent with
international experience and expertise to
integrate manufacturing capabilities with
engineering resources and supply chain
support through leveraging opportunities
in Malaysia and across the region.
Moving Forward
MPRC targets to have at least four more
companies signed up by the end of 2012
for its GIFT programme. MPRC will conduct
international road shows in Houston,
Geneva and London to promote the GIFT
programme and attract international
oil traders to locate their operations in
Malaysia. It also targets to win the bid as
the host of the annual Offshore Technology
Conference, the world’s foremost event for
the development of offshore resources
in the fields of drilling, exploration,
production, and environmental protection.
It aims to host the conference by 2014.
The downstream industry of oil and gas will
be kept driven by two key factors namely
high oil prices, which have improved
industry margins hence improving
the economics for oil field services &
equipment business, as well as the shift
towards more exploration and production
activities in geologically-complex fields
which increases demand for OFSE. Both
of these factors are expected to continue
to drive growth in the Malaysian OFSE
industry over the coming years.