Serba Dinamik Annual Report 2018

88 ANNUAL REPORT 2018 SERBA DINAMIK HOLDINGS BERHAD Some of the notable developments within the upstream oil and gas sector in Malaysia since January 2018 includes: The B15 gas field in offshore Sarawak commenced production in March 2018. The B15 development comprises a processing platform with a 21-mile pipeline tied into existing infrastructure for onwards transmission into the Malaysia Liquefied Natural Gas (MLNG) complex at Bintulu. The facilities at the platform are expected to generate production which peaks at 100 Million Cubic Feet per Day (MMcfd). The Pegaga gas field in offshore Sarawak which involves an investment of approximately USD1 billion has proceeded to the development and installation stage in 2018. It is expected to commence production by the third quarter of 2021. In addition, following the strong financial performance recorded in 2018, PETRONAS’ capital investment for 2019 is set to be higher than the RM46.8 billion spent in 2018. PETRONAS anticipated the capital investment for 2019 to be over RM50 billion, of which RM15 billion will be allocated for the upstream activities in Malaysia. The higher capital allocation would benefit the oil and gas service providers in Malaysia. Performance of the Upstream Oil and Gas Sector in Malaysia Almost all of Malaysia’s existing oil and gas fields are located offshore. As at March 2018, Malaysia’s upstream oil and gas sector was supported by 371 offshore platforms and subsea structures equipped with more than 700 units of rotating equipment on these offshore facilities. This includes major compressors, crude oil transfer pumps, gas lift or gas injection compressors, water injection pumps and power generators ( Figure 4-4 ). The level of production of oil and gas would indicate the level of demand for production facility maintenance. In 2018, the growth in Malaysia’s oil and gas industry was not hindered by the volatile oil and gas prices. Overall production of crude oil and condensate, and natural gas increased by a CAGR of 1.8% and 0.5% respectively between 2014 and 2018. However, crude oil and condensates, and natural gas production in 2018 declined by 2.0% and 5.1% respectively (Figure 4-5 and 4-6) . The fall in production reflects PETRONAS’ voluntary decision to reduce crude oil production to support efforts by OPEC to stabilise crude oil prices. Figure 4-4: Some of Malaysia’s Upstream Facilities Figure 4-5: Local Production of Crude Oil and Condensate 371 platforms and subsea structures 722 rotating equipment 13 onshore crude and/or gas terminals (Source: PETRONAS) (Source: Bank Negara Malaysia) O I L A N D G A S 2014 100 Barrels Per Day (’000) Growth Rates (%) 200 300 400 500 600 700 0 -5 5 10 15 2015 2016 2017 2018 4.7% 8.5% 1.9% -1.0% -2.0% 654 603 667 660 647