Serba Dinamik Annual Report 2019

94 2019 ANNUAL REPORT INDUSTRY IMPACT ON OUR BUSINESS SERBA DINAMIK HOLDINGS BERHAD I N D U S T R Y I M P A C T O N O U R B U S I N E S S OUR POSITION WITHIN THE OIL AND GAS INDUSTRY We operate within the upstream sector of the oil and gas industry, which comprises exploration, appraisal, development and production activities. Exploration refers to investigating a specific area to determine the existence and assess characteristics of oil and gas deposits. Exploration activities also include appraisal, which is concerned with determining the economic and technical viability of discovered oil and gas deposits. Development activities are carried out to bring an untapped economically viable oil and gas reserve into production or significantly expanding an existing production facility. Production activities are those that are related to the extraction of oil and gas from identified and developed reserves. We ma inl y operate wi thin the oi l and gas indust ry which cont r ibuted to a l arge propor t ion of our revenue . Wi thin the oi l and gas indust ry , our top f i ve revenue cont r ibut ing count r ies inc lude Ma l ays i a , Qatar , UAE, Bahra in and Saudi Arabi a . As such, our bus iness is impacted by deve l opments of the oi l and gas indust ry gl oba l l y , in Ma l ays i a as we l l as in the Middl e East . STRUCTURE OF THE OIL AND GAS INDUSTRY Crude oil and natural gas firstly have to be extracted from the ground, then transported to processing plants and finally processed for use across industries, commerce and the community. The oil and gas industry is structured along types of activities, namely upstream, midstream and downstream activities as depicted in the Figure 4-1 . While all sectors of the oil and gas industry are related and dependent on each other, each sector requires different assets, technologies and skills set to carry out its activities, and faces different challenges, threats and risk factors. Figure 4-1: Our positioning within the oil and gas industry Upstream Exploration Appraisal Development Production Crude Oil Natural Gas Transportation Pipeline and Ship Transportation Pipeline and Ship Midstream Downstream Refining Distribution to Market Petrochemicals Gas Processing CNG Compression LNG Regasification LNG Liquefaction Refined Petroleum Products C H A P T E R 0 4 4 . 1 We operate within these segments of the upstream and downstream sectors of the oil and gas industry LNG = liquified natural gas; CNG = compressed natural gas