Can Sabah achieve RM1 billion in local oil and gas contract awards this year?

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Sabah Aims for RM1 Billion in Local Oil and Gas Contract Awards This Year

Sabah is targeting RM1 billion in local contract awards within the oil and gas sector for the current year, representing 20 per cent of the total contracts anticipated. As of the latest figures, local contract awards have already reached RM564 million, accounting for 11 per cent of the total expenditure in 2022. The state government has also set a future target to increase local participation to 30 per cent by next year.
Progress Towards Local Contract Award Targets

The Chief Minister of Sabah, Datuk Seri Hajiji Noor, announced these targets at the 10th Sabah Oil, Gas and Energy Conference and Exhibition (SOGCE). He highlighted that the state's focus extends beyond contract awards to include the recruitment and development of local talent within the sector, identifying this as a key priority. The current achievement of RM564 million in local contract awards by May 31, 2023, indicates a substantial step towards the RM1 billion goal.
Sabah's Broader Economic Initiatives

These objectives are part of Sabah's broader economic strategy, the Sabah Maju Jaya (SMJ) initiatives. These initiatives aim to attract investment not only in traditional oil and gas assets, including upstream and liquefied natural gas (LNG) production, but also in green energy opportunities. The state is actively seeking investors for renewable energy sources such as solar, storage technologies, hydro, and geothermal power, alongside carbon market opportunities.
State Revenue and Investment Growth

Sabah has demonstrated significant economic progress, achieving a record revenue of RM6.960 billion by the end of December 2022, a 28 per cent increase from the previous year. This growth is partly attributed to agreements with Petronas, including the Commercial Collaboration Agreement signed in December 2021 and the Sabah Gas Master Plan launched in January 2022, which are projected to generate an additional RM2.45 billion annually in Sales and Services Tax (SST) from the oil and gas sector. Furthermore, Sabah's 10 per cent equity in LNG9 has already yielded RM337 million since 2022. The state is also facilitating major investments, such as the US$2 billion Esteel project at the Sabah Oil and Gas Industrial Park (SOGIP), which is expected to commence commercial production by 2026-2027.

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Can Sabah achieve RM1 billion in local oil and gas contract awards this year?

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