MPRC’S Commentary on Budget 2022

KUALA LUMPUR, 29 October 2021 – Malaysia’s Budget 2022 focus and support towards small and medium enterprises is necessary and welcomed, in light of the challenging environment in the last two years, industry development agency for oil and gas services and equipment (OGSE) Malaysia Petroleum Resources Corporation (MPRC) said today.

“The Government effectively continues to place emphasis on recovery, rebuilding national resilience and catalysing reform to jumpstart the economy, in line with the reopening of various industries, including the OGSE industry. Initiatives providing export assistance, alternative financing, among others, will support and enable recovery of the OGSE SMEs, which accounts 84% of Malaysia’s OGSE sector,” MPRC President and Chief Executive Officer, Mohd Yazid Ja’afar said.

MPRC is pleased to note that The National OGSE Industry Blueprint 2021-2030 is aligned with both the Budget 2022 and the 12th Malaysia Plan (12MP), which depicts aspirations to link Malaysia’s economic plans with the Sustainability Development Goals (SDGs). This is especially relevant as the National OGSE Industry Blueprint 2021-2030 lists sustainability as one of the four critical levers in ensuring that the OGSE industry will survive and grow in the post-pandemic economy.

The Government’s commitment to reduce the nation’s greenhouse gas emissions intensity and make Malaysia a carbon-neutral country as early as 2050 is commendable and comes at a pivotal time for the country. The initiatives outlined in Budget 2022 will go towards addressing sustainability-related awareness gap among OGSE companies. “Towards this end, MPRC will be collaborating with public and private universities to offer courses that will increase the awareness and competencies on sustainability as well as energy transition,” Mohd Yazid added.

As a member of the Strategic Committee under the Ministry of Entrepreneurship Development and Cooperatives (MEDAC) Vendor Development Programme, MPRC supports the initiative to increase the double tax deduction for anchor companies from RM300,000 up to RM500,000 for the next 5 years. MPRC believes that with the wider pool of such anchor companies, local Bumiputera vendors will stand to benefit from this programme

The talent and technology initiatives announced in the Budget 2022 such as the “hab inovasi” will go towards encouraging and enabling industry players to effectively retain highly skilled talent by creating jobs and maintaining wage levels and continue attracting talent to industry. This also further complements MPRC’s OGSE Development Grant, which serves to accelerate development of innovative and market-driven solutions among OGSE players. This will also set a path for OGSE companies to inculcate and carve out a technological edge.

In summary, MPRC believes believe the Budget 2022 will further support the OGSE sector and spur more strategic collaborations that will create a robust, resilient and globally competitive Malaysian OGSE sector.