MALAYSIA CAN BECOME ONE OF WORLD'S KEY DEEPWATER OIL, GAS HUBS, SAYS MSIAN DPM

LABUAN (Federal Territory, Malaysia), July 22 (Bernama) -- If done right,
Malaysia can become a key deepwater oil and gas hub globally after Houston, Rio
De Janeiro and Aberdeen, said Deputy Prime Minister Muhyiddin Yassin
Thursday.

He said clearly, the era of easy oil is over and the exploration and
production of oil and gas will move increasingly into deeper waters, presenting
new challenges as well as opportunities.

"Engineering and support services demand for this water access in the Asia
Pacific, particularly in the South China Sea, which has been growing strongly
over the past two to three years.

"Malaysia needs to be nimble in responding to this factor's new
requirements," he said at the Signing Ceremony of a memorandum of
understanding (MoU) between Asia Supply Base Sdn Bhd (ASB) and Labuan Shipyard
and Engineering Sdn Bhd (LSE) here.

However, Muhyiddin reminded that the window of opportunity was not
perpetual and hence, capacity and capability are of the essence if not paramount
for Malaysia to leverage on and build existing oil and gas assets.

He said ASB and LSE in Labuan were both opportunely and strategically
located on the doorstep of oil and gas activities, being about 200 nautical
miles to the nearest oil and gas fields off East Malaysia.

ASB is a one-stop centralised logistic support centre tailored to the
requirements of oil and gas exploration, development and production activities.

LSE meanwhile, has a proven track record in oil and gas engineering and
fabrication, ship-building, ship-repair and construction of power barges.

The MoU between ASB, a wholly-owned entity of the Sabah government, and LSE
witnessed by Muhyiddin, is aimed at turning Labuan into a hub for oil and gas as
a positive economic contribution to Sabah.

Through the MoU, ASB and LSE are to offer their capabilties and facilities
as established players in their respective fields, namely logistics and
engineering fabrication, while positioning themselves to actively participate in
the development of the oil and gas industry in Sabah.

According to Muhyiddin, location alone would not make a successful oil and
gas regional hub, saying that today, oil and gas players demanded an efficient
one-stop shop with fully integrated services of facilities, warehouses,
workshops as well as ship maintenance and fabrication yards.

"For example, our worthy oil and gas hub competitors in Singapore have
benefited tremendously from a central biographical location and connectivity.

"More importantly, they have successfully leveraged on the comprehensive oil
and gas ecosystem in place, encompasssing the whole spectrum of
operators, specialised equipment manufacturers, service providers and offshore
engineering companies," he highlighted.

Meanwhile, Muhyiddin said the east Malaysian state of Sabah in particular,
had shown strong potential in the oil and gas business where recent oil and gas
discoveries in the Dumusut / Kakap, Malikai, Jangas, Ubah Crest, Pisangan and
Kamunsu deep water fields off the state's shores were currently being developed
and are expected to commence production between 2011 and 2015.

He said the Kikeh deepwater field, the country's first deepwater offshore
development, in fact had already begun production in August 2007.

"This sizeable ultra deepwater blocks offshore, coupled with the Kebabangan
cluster gas fields, the completion of the Sabah Oil and Gas Terminal (SOGT) and
the Sarawak-Sabah pipeline project, would position Labuan and Sabah as one of
the leading oil and gas hubs in the country and possibly in the region," he
added.

Muhyiddin said to stay ahead in the global marine and offshore arena, the
Labuan marine and offshore industry, also needed to continually improve the
competitive edge.

He said a cost-competitve and efficient pro-business environment, with
strong infrastructure and a comprehensive supporting industry, would be critical
success factors to bring in investors.

"While cost and efficency are very important short to medium term success
factors, the long term key for Labuan to be a successful oil and gas hub, is the
creation of a sustainable pipeline of highly skilled and productive
workforce grounded on a strong engineering foundation," he explained.
-- BERNAMA


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