Serba Dinamik Annual Report 2019

104 2019 ANNUAL REPORT INDUSTRY IMPACT ON OUR BUSINESS SERBA DINAMIK HOLDINGS BERHAD For FYE 2019, 60% of our total revenue was derived from the Middle East, most of which were from the oil and gas industry. Qatar, United Arab Emirates ("UAE"), Bahrain and Saudi Arabia continue to be our top revenue contributors in the Middle East region. As such, developments in the oil and gas industry for these countries may have an impact on our business. PERFORMANCEOF THEUPSTREAMOIL ANDGAS SECTOR IN THE MIDDLE EAST Middle East maintained its strong position as one of the biggest oil and gas producers at the global level despite fluctuation in oil and gas prices. In 2018, the production of crude oil from the Middle East was 25.7 million barrels per day ("mbpd"), which accounted for 34% of the total global crude oil production. In terms of production by region in 2018, crude oil production in Saudi Arabia, UAE and Qatar picked up pace to record a y-o-y growth in production of 3.6%, 1.4% and 0.2% as compared to -4.8%, -3.9% and -7.9% in the previous year. Meanwhile, crude oil production in Bahrain recorded a decline at a lower rate of 1.0% in 2018, compared to the decline of 4.9% in the previous year. (Figure 4-10 to 4-13) Between 2014 and 2018, natural gas production in Middle East grew at a CAGR of 4.2% from 582.7 billion cubic metres ("bcm") in 2014 to 687.3 bcm in 2018. Natural gas production in Qatar picked up pace to record a y-o-y growth of 1.8% in 2018 after recording two years of decline in 2016 and 2017. Natural gas production in Qatar, UAE, Bahrain and Saudi Arabia registered a CAGR of 0.9%, 5.2%, 0.2% and 3.6% respectively between 2014 and 2018 (Figure 4-14 to 4-17) . In 2019, the overall oil demand in the Middle East recorded a growth of 1.0%, showing sign of strength regaining from the decline of 0.6% in the previous year due to economic challenges including subsidiary removal, substitution plans, geopolitical issues and policies related to energy efficiency. (Source: OPEC) (Source: OPEC) (Source: OPEC) Figure 4-10: Crude Oil Production in Qatar Figure 4-11: Crude Oil Production in UAE Figure 4-12: Crude Oil Production in Bahrain M I D D L E E A S T O I L A N D G A S I N D U S T R Y C H A P T E R 0 4 4 . 4 Barrels per Day (’000) Growth Rates (%) 2018 2017 2014 2015 2016 601 652 709 656 600 0.2% -0.7% -7.9% -2.0% -7.5% Growth Rate Crude Oil Production Barrels per Day (’000) Growth Rates (%) 2018 2017 2014 2015 2016 3,008 3,088 2,794 2,989 2,967 1.4% 3.3% -3.9% -0.1% 7.0% Growth Rate Crude Oil Production Barrels per Day (’000) Growth Rates (%) 2018 2017 2014 2015 2016 193 205 203 203 195 -1.0% 1.2% -4.9% 2.5% 0.0% Growth Rate Crude Oil Production 2014 -2018 CAGR = -4.1% • 2016 -2018 CAGR = -4.0% 2014 -2018 CAGR = 1.9% • 2016 -2018 CAGR = -1.3% 2014 -2018 CAGR = -1.2% • 2016 -2018 CAGR = -3.0%