A report in the Nikkei Asian Review said, under the pact, MMC’s unit MMC Oil & Gas Engineering Sdn Bhd and Petra Energy’s subsidiary Petra Resources Sdn Bhd would together pursue “selective opportunities” involving engineering and design in brownfield oil and gas projects in the country.

MMC informed the stock exchange that “MMC and Petra agree to cooperate and collaborate in respect of design and detailed engineering scope for potential projects. This cooperation and collaboration shall benefit both parties based on a contractor-subcontractor relationship.”

MMC Oil & Gas, formed in 1984, provides engineering design services to the oil and gas as well as petrochemical industries. Petra Energy mostly provides brownfield services, including maintenance for oil rigs.

“This memorandum of understanding serves as an intention of the parties to cooperate and collaborate for bidding purposes,” Petra Energy said. The agreement expires within a year.

Shares of MMC Corp fell 0.9 per cent to RM2.10 on Monday while Petra Energy’s shares were unchanged at RM1.25.

The collaboration, according to the Nikkei report, comes at a time when the oil-and-gas industry in Malaysia is showing signs of potential recovery after activities and contract flows slumped following the collapse in oil prices since the second half of 2014.

Last week, Petronas handed out its first production sharing contract in more than one-and-half years to explore a hydrocarbon block off the Sarawak state, said the report.

Analysts, however, say an industry-wide recovery in capital expenditure remains unlikely in the near-term as oil prices remain depressed despite a recent rebound.

“Patchy news flow regarding contract award is bubbling within the upstream segment,” Kenanga Investment Bank analyst Sean Lim wrote in a July 22 note to investors. “We maintain forecast of 2016 year-end Brent crude price at USD47 as we see limited upside in crude prices from current level.”