Malaysia Oil and Gas Services Sector Mergers and Acquisitions (M&A) Opportunities: Forecast to 2025

  • ID: 3984479
  • Report
  • Region: Malaysia
  • 70 Pages
  • Frost & Sullivan
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Growth is Likely Through Consolidation and Integration Even as Oil Price Witnesses a Reversal of Fortunes

Oil and gas companies, oil and gas service companies, law firms, financial service companies, and government institutions, have all been calling for competitive advantage through mergers and acquisitions (M&A) in Malaysia. In recent times, Malaysian oil and gas service companies have been adversely hit by the low oil price regime. Petronas, the leading national oil company of Malaysia, has cut down significantly on the awarding of new production sharing contracts (PSCs) and risk sharing contracts (RSCs).

Apart from investment on brownfield projects, final investment decision (FID) on upstream greenfield projects are likely to be deferred. The Asia-Pacific region’s upstream expenditure in 2016 is expected to decrease by 33% compared to 2015 levels (it declined by 21% compared to 2014 levels).

At the same time, the Asia-Pacific region is a net oil importer, importing around 75% of its oil requirements. This trend is expected to continue. As a result, service companies have a greater challenge in keeping their revenue streams growing.

Consolidation could provide a solution in these tough times and lead to major advantages like economies of scale, geographic diversification, and integration. This study provides an analysis of the expected M&A themes in the oil and gas industry over the course of the next decade and beyond.

The Global Energy and Environment Research Team at Frost and Sullivan also picks the top sectors and the top 16 companies in the oil and gas services sector in Malaysia which are ripe for consolidation.

Research Scope:

  • O&G - Upstream and downstream
  • Material-based industry
  • Equipment-based industry (rental, specific equipment provider, etc.)
  • Gas utilisation industry
  • Supporting services

Construction service:

  • EPC companies (Planning, Implementation & Supervision)

Non-construction service:

  • Seismic Survey and Non Seismic Survey
  • Geology and Geophysics
  • Drilling and Well Drilling Operations
  • Waste Management

Research Approach:

  • Building a list of 1000+ companies operating throughout the oil and gas value chain
  • 30+ industry sub sectors were identified, based on current market condition and value chain position
  • An initial analysis conducted through primary interviews with different industry stakeholder
  • Each of these sectors were analyzed in in detail from a risk- opportunity perspective to arrive at the most promising companies per sector

Key Questions that This Study Will Answer:

  • Who: Who are the most active buyers?
  • What: What are the hottest sectors for the M&A deals?
  • Where: Where are the buyers located? Which region is most attracted to the Malaysian O&G sector?
  • When: An analysis of year-wise transactions
  • Why: What is the underlying logic behind these M&A deals?
  • How: How much were the target companies valued at an aggregate level?
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1. Executive Summary
  • Key Findings
  • Promising Target Companies   
2. Research Scope and Definition
  • Scope of the Study
  • Industry Sub-Sectors Selection Methodology   
3. Introduction
  • Oil Price Formation Mechanism
  • Gas Price Formation Mechanism
  • Analysis of Global Oil and Gas Market
  • Analysis of the Condition of the World Oil and Gas Market   
4. Key Industry Transforming Trends and M&A Implications
  • Key Upstream Trends
  • Impact of Low Oil Prices on Asia-Pacific Upstream Segment
  • Key Downstream Trends
  • Positive Outlook for Asia-Pacific Petroleum Storage Projects
  • Key Future Trend-Smart Oilfield Services
  • Implications from an M&A Perspective   
5. Discussion on the Malaysian Oil and Gas Industry
  • Malaysia-Oil Value Chain
  • Malaysia-Gas Value Chain
  • Malaysian Oil and Gas Business Activity
  • Malaysia Oil and Gas Industry-SWOT Analysis
  • Upstream Segment-Major Player Identification
  • Midstream and Downstream Segment-Major Player Identification   
6. Malaysian Oil and Gas Services-M&A Transaction Analysis
  • Understanding the M&A Transactions
  • Who-Most Active Buyers
  • Where and When-Geography and Timeline
  • What and How Much-Sectors of Interest and Valuation
  • Why-The M&A Themes   
7. Cost and Risk Analysis-M&A Perspective
  • Key Risks Across Upstream Stages
  • Key Risks Across Midstream & Downstream
  • Cost Structure in the Malaysian Oil & Gas Industry-Upstream Segment
  • Operating Cost Analysis in the Malaysian Oil and Gas Industry-Upstream
  • Operating Cost Analysis in the Malaysian Oil and Gas Industry-Downstream
  • Impact of Projected Crude Oil Price on Financing
  • Implications and Current Drivers for M&A   
8. Top 16 Target Companies
  • Company Selection Methodology-Strategic Approach
  • Risks & Opportunity Across Sub Sectors
  • M&A Sector Scorecard
  • Sector-Wise Selection Criteria for Promising Companies
  • Oil and Gas Fabrication-Sectoral Overview
  • Oil and Gas Fabrication-Promising Companies
  • Oil and Gas Upstream Services-Sectoral Overview
  • Oil and Gas Upstream Services-Promising Companies
  • Offshore Vessels-Sectoral Overview
  • Offshore Vessels-Promising Companies
  • Engineering Services-Sectoral Overview
  • Engineering Services-Promising Companies   
9. Appendix
  • Abbreviations
  • Legal Disclaimer
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