SABAH OIL AND GAS INDUSTRY SHOULD CONTRIBUTE MORE TO SABAH LOCAL ECONOMY

22 DEC 2020

SIPITANG: The oil and gas industry must increase its contribution to Sabah’s local economy in order to sustainably support its population and boost value-add activities said, Deputy Chief Minister Dr. Joachim Gunsalam.

Joachim who is also the Minister of Industrial Development said that it is crucial for the state to continue moving up the value chain in order to maximise the benefits derived from its hydrocarbon resources and to create valuable spin-offs across the state.

"To realise this vision, core infrastructures including roads, highways, pipelines, power and water supply will require significant investment, in order to facilitate increased downstream activities.

"Despite the fact that Sabah is the largest crude oil-producing state in Malaysia which accounted for 42 per cent of the total production, Sabah still has the highest unemployment rate and the slowest rate of economic growth in Malaysia," he added.

He also commended the national oil company PETRONAS's role in propelling Sabah’s oil and gas industry growth since its inception in 1974.

"Efforts in recent years regarding deepwater exploration and production in Sabah’s offshore fields and the improvement of the Production Sharing Contract (PSC) by PETRONAS to optimally regulate the upstream has enabled the country to prosper from the state hydrocarbon resources.

"Since 2011, when Sabah Sarawak Integrated Oil and Gas Project (SSIOGP) development started together with the Petronas Chemical Fertilizer Sabah Sdn Bhd (PCFSSB), also known as the Sabah Ammonia Urea (SAMUR) project, there have been a significant spillover effects for local communities in the Sipitang area," he added.

During a recent visit to the facility last week, Joachim was pleased to know that PCFSSB workforce comprises 80 per cent Sabahan and meanwhile, 77 per cent of overall PETRONAS Sabah staffs are Sabahan.

"It is a positive thing for Sabah and in line with the aspiration of the state government in ensuring direct local community participation in the industry.

"Through the state agency Sabah Oil and Gas Development Corporation (SOGDC), the state government will continue to spearhead efforts to develop Sabah’s oil and gas industry through the dedicated state oil and gas industrial park; Sipitang Oil and Gas Industrial Park (SOGIP) and further develop its potential as a world-class integrated petrochemical site in the region," he said.