But this may not translate to many new jobs or higher salaries, say industry sources.
Speaking to FMT, one oil and gas analyst said while recent developments at home and abroad were encouraging, companies were likely to remain cautious with spending.
“I estimate that throughout 2018, the oil price will be between US$60 and US$65 per barrel. Petronas is basing its budget on a more conservative US$52 per barrel,” said the analyst who spoke on condition of anonymity.
“The fact that the oil price now sits above the US$60 per barrel mark brings some ‘sunlight’ into the sector.”
Still, he said, the industry, which in recent years saw massive cutbacks and retrenchments due to plummeting prices, was a long way from full recovery.
In terms of cost-cutting measures and retrenchments, the analyst said these had been maximised and would likely be maintained, with recruitment exercises only on a need-to basis.
“I believe most industry players are operating with the bare minimum. Even though we can see activity in the industry is picking up, things like charter rates for ships and jack-up rigs remain flat due to an oversupply of such assets.”
Elaborating on charter rates, the analyst said that a few years ago, jack-up rig owners could charge oil companies US$140,000 a day for the use of a rig, but nowadays, could only command around US$60,000 per day.
As for recruitment, the analyst said the industry’s focus for 2018 would be on the downstream sector.
“So, where there is a need for talent in the downstream sector, you will see job opportunities opening up, like at the Refinery and Petrochemical Integrated Development (RAPID) complex in Pengerang, Johor.”
RAPID is scheduled to start operating in the first quarter of 2019. It will have an oil refinery producing 300,000 barrels per day and a petrochemical complex with a production capacity of 7.7 million tonnes.
Salaries lower by 30%
A director of a human resources company, which services oil and gas companies, agreed that the only silver lining, as far as employment was concerned, was in the downstream sector.
“Even the big companies are budget conscious and want to optimise their manpower by organising their workforce and getting existing employees to take on multiple roles and tasks,” he told FMT.
The director, who declined to be named for fear it would affect business, added that at least one big oil company in Malaysia was going to retrench more workers this year.
“Oil and gas prices are improving but for workers, there isn’t much good news, save for those in the downstream sector.
“Even salaries have been significantly downsized for some, particularly those who used to work offshore because they were the worst hit by the retrenchments.”
The director said some industry professionals were working for 30% less than what they were previously getting because they would rather take less, rather than be unemployed.
“But this is a global phenomenon. Many oil and gas professionals in Europe are going through the same thing.”
According to a previous Berita Harian report, over 2,000 oil and gas employees lost their jobs between 2015 and September 2016.