Sabah drafts a five-year OGSE roadmap from 2026 to 2030, targeting 60% local contract ownership and sustainable industry growth
KOTA KINABALU: The Sabah government is formulating the state’s oil and gas services and equipment (OGSE) industry roadmap for the five years from 2026 to 2030 as part of its efforts to develop a sustainable OGSE sector in the state.
Chief Minister Datuk Seri Hajiji Noor said the state government believes that the resilience of the OGSE industry must be built through close collaboration between the government, PETRONAS, and all key stakeholders, including operators, contractors, vendors, industry associations, financial institutions, and training providers.
“Feedback from all stakeholders is crucial in the development of this roadmap. Therefore, I urge participants of the OGSE conference to take advantage of this platform to discuss the strategic plan. This roadmap must be practical, industry-led, and results-oriented. It should address the real constraints faced by local companies while providing a clear growth pathway by focusing on three critical areas,” he said.
His speech was delivered on his behalf by Deputy Chief Minister II and Sabah Finance Minister Datuk Seri Masidi Manjun at the inaugural OGSE Conference and Exhibition 2026 held here today.
Hajiji noted that the three critical areas that require attention are access to capital, technical capability enhancement, and talent matching to ensure that the OGSE sector becomes a high-potential growth driver in Sabah.
“This will enable a transition from merely extracting resources to providing value-added services, while fostering inclusive growth and supporting the SMJ 2.0 agenda towards higher productivity and shared prosperity. More importantly, this sector serves as a key driver for local content development, job creation, small and medium enterprise (SME) growth, and the diversification of state revenue sources,” he said.
Hajiji said Sabah is targeting 60 percent contract ownership by local OGSE vendors this year, following the successful implementation of policies under Subcommittee 4 (SC4) of the Commercial Collaboration Agreement (CCA) between the state government and PETRONAS, which was signed on Dec 7, 2021.
“Since the implementation of the SC4 policies, the number of active contracts secured by Sabah-based local vendors has increased significantly from 133 contracts in 2021 to 499 active contracts in 2026. To date, a total of 393 Sabah-based OGSE vendors have been officially recognized and assessed based on their technical capabilities,” he added.
Hajiji stated that the state government wants Sabah companies to move beyond the role of low-margin subcontractors and emerge as main contractors, license holders, technology recipients, and creators of long-term value.
He added that Sabah welcomes the presence of international operators, major national players, and service providers as important partners in the state’s growth, offering, among other advantages, a strong resource base, a competitive operating environment, and a clear policy direction through the CCA.
He noted that Sabah’s oil and gas industry has made encouraging progress since the first major discovery in 1971, with the state playing a significant role in Malaysia’s energy landscape by contributing more than 40 percent of the nation’s crude oil production and approximately 20 percent of its natural gas production.
However, Hajiji stressed that Sabah can no longer be satisfied with being merely a supplier of raw resources, as production figures alone are insufficient to build a resilient modern economy. “The future of Sabah lies not only in resource extraction, but also in equity participation, execution, and local ownership,” he said.
