SMJ Energy Sdn Bhd executive director Terry Biusing attributed the dramatic rise to the combined efforts of the state and national oil company, coordinated through a dedicated joint sub-committee established under the CCA brokered by chief minister Hajiji Nor.
Known as SC4, the sub-committee has played a pivotal role in driving local participation within Sabah’s oil and gas services and equipment (OGSE) sector.
“Back in 2021, there were only some 130 contracts (in the OGSE sector) held by Sabahan companies. As of August, we have over 455 contracts,” he said in an exclusive interview with FMT.
According to Terry, SMJ Energy, being a company linked to the Sabah government, has a dual mandate: anchor Sabah’s economic growth, and honour its social obligations.
“The objective of the subcommittee is to increase the participation of Sabahan companies, and our measure of success is the number of Sabahan companies holding as many contracts as possible over time.
“That will drive revenue to those companies,” said Terry, who heads SMJ Energy’s OGSE and Corporate division.
He added that with some 1400 active contracts, Sabah firms now hold roughly 33% of the market share.
In 2023, Petronas, as part of its commitment and deliverables under SC4, launched the Kinabalu Activity Outlook, a strategic forecast of key activities and tenders up for grabs over the next three years.
That initiative has allowed companies operating in Sabah to be proactive in their investment and partnership planning, said Terry.
He said around 169 Sabahan companies are also actively participating in oil and gas tenders — a 260% growth since 2021.
“All this was driven by the local content policy in partnership with Petronas,” he said.
Beyond contract numbers, Terry pointed to other tangible gains.
“There’s been a significant increase in the revenue earned by Sabahan companies in 2024: RM1 billion in Sabah, another RM1 billion outside of Sabah.”
He said this revenue boost, along with rising participation and market share, reflect the effectiveness of the CCA’s localisation goals.
Prioritising Sabahans
Sabah’s local content strategy has matured to centre on three core mechanisms designed to strengthen the participation of Sabahan firms.
“First, we had an agreement with Petronas to ensure that Sabahan companies are given priority for any tender below RM20 million for upstream (work), and below RM10 million for downstream, regardless of the work category.”
In addition, Terry said any tender falling into 135 work categories has also been specifically reserved for Sabahans, describing it as a “margin of preference”.
This gives a commercial advantage to Sabahan companies, allowing them to be awarded contracts, even if they are not the lowest bidder, he explained.
To ensure quality and capability, Terry stressed the importance of partnerships with non-Sabahan oil and gas companies, especially from among the more experienced industry players,
He said engaging external technology providers is essential, especially when tendering for complex work.
He said both the Sabah state government and Petronas have agreed that any major tender involving a non-Sabahan company must involve a local partner, a move designed to ensure technology transfer and capability building.
“We are actually making that happen right now.”