Sabah targets 60 percent local vendor control in energy chain

Sabah is setting an ambitious target to secure 60% of contracts within its energy supply chain for local vendors, a move that signifies a strong commitment to economic self-determination and the long-term prosperity of its people. Spearheaded by the Ministry of Industrial Development, Entrepreneurship and Transport (MINDET), the Sabah Oil and Gas Services Council (SOGSC), and the Sabah Bumiputera Petroleum Contractors Association (PKPBS), with crucial strategic backing from SMJ Energy, this initiative aims to ensure that Sabah's abundant natural resources directly translate into tangible economic benefits for the state's residents.

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One of the main contents is a panel session featuring giant operators such as Petronas, Shell, Total Energy and Hibiscus to discuss strategies for facing price shocks and the impact of global conflicts on the industry.

The upcoming Oil and Gas Services and Equipment Sabah 2026 (OGSE Sabah 2026) conference and exhibition, scheduled for June 4-6 at the Sabah International Convention Centre (SICC), will serve as a critical platform for this endeavor. It will not only facilitate discussions on enhancing national economic resilience amidst global energy crises but also provide a vital forum for industry players. Discussions will include strategies for navigating price volatility and the impact of global conflicts on the industry, featuring insights from major operators like Petronas, Shell, Total Energy, and Hibiscus.

This push for local participation is a cornerstone of Sabah's broader vision to become a leading regional energy services hub by 2030. A five-year strategic roadmap, set to be unveiled in June, will further detail the plans to achieve this goal. The state's position as the primary engine for Malaysia's upstream oil and gas sector, contributing 50% of the nation's crude oil production, offers immense market opportunities. The momentum of local vendors is already evident, with a significant increase in contract awards.

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The momentum of local vendors is very extraordinary with an increase in contracts by 73 percent to 499 contracts in 2025 compared to 289 in the previous year.

From our perspective, this is a crucial step towards ensuring that the wealth generated from Sabah's natural resources benefits the local economy directly. While international coverage might focus on global energy markets, we recognize the profound local impact of empowering Sabah's businesses. This strategy ensures that value remains within the state, particularly in critical areas like AI technology, deep-sea marine services, and decarbonization efforts. OGSE Sabah 2026 is not just an exhibition; it's a declaration of intent for Sabah to take greater control of its economic destiny in the vital energy sector.

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We want this value chain to continue to remain within the state, especially in critical fields such as AI technology, deep-sea marine services, and decarbonization.