Oil prices were volatile in 2023, falling as low as US$67 in May as supply and demand was directly impacted by the ongoing geopolitical tensions.
As energy importers look to diversify supplies, Malaysia’s oil and gas industry may benefit from this political uncertainty. With an annual growth forecast at over 2.6% per year by the end of the decade, Malaysia looks well-positioned to be Asia’s main oil and gas hub.
Malaysia continues to invest both in exploration and extraction and in downstream processing, with main player Petronas planning for a significantly higher capital expenditure until 2027. This commitment is expected to have a positive ripple effect on the sector as a whole and, with likely higher prices in 2024, Malaysia will likely benefit from this investment.
We also see continued support from the Malaysian government, with tax incentives being offered for the upcoming Pengerang Integrated Petroleum Complex in Johor. The downstream oil and gas and petrochemical industrial area will boost Malaysia’s capabilities to leverage rising energy demand in Asia, and spur continued opportunity in the sector.
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increasing energy costs present a dual challenge for malaysia
While higher energy prices are good news for the industry, they are a double-edged sword for Malaysia as a whole. On one hand, this will add momentum to the push for electric vehicles, further reinforcing the momentum behind the energy transition.
Meanwhile, the higher costs of petrol and diesel pose a burden for consumers. The Malaysian government has sought to offset this by introducing fuel subsidies based on individual and household earnings in 2024. The 2024 budget has also abolished subsidies for the top 10 per cent highest electricity users to create a more equitable market for all consumers.
malaysia’s push for green energy
In the second half of the year, Malaysia is actively steering towards green energy initiatives outlined in the Malaysia Renewable Energy Roadmap. The country aims to meet 40% of energy needs from renewable sources by 2035 and achieve net zero emissions by 2050. Despite a strong demand for petrochemicals and increased investment in the sector, the transition to green energy will not negatively impact the oil and gas industry in the short term.
Major industry players are beginning to move into renewables, with Petronas’ Gentari unit producing both blue and green hydrogen. South Korean and Japanese firms are also looking at producing green hydrogen in Sarawak by 2027.
The government is keen to drive this transition, actively encouraging investment through generous tax breaks, particularly in areas such as carbon capture and storage. Given the continued demand for both petrochemicals and renewables, we expect to see more engineering, procurement, construction and commissioning (EPCC) projects to boost the sector’s growth.
This opens up long-term growth opportunities for oil and gas companies to support the green transition as well, but there is a pressing need to source qualified talent for those roles. Although the solar industry is now fairly established, there are just a few operational hydrogen projects globally, so finding experienced candidates with relevant exposure in Malaysia poses a challenge to employers.
While the core skills required for green jobs are project management and the overseeing of construction and production, there are some unique challenges which require talent with experience in hydrogen projects. A potential solution may be to bring in experts from overseas to train up local teams, which will place increasing importance on in-house learning and development programmes.
oil and gas talent are keen on upskilling for the green transition
Having a clear upskilling roadmap towards green transition will be a win-win for employers. This is especially because candidates increasingly prioritising learning and development opportunities when evaluating job offers. Talent recognises that the industry needs to change its business models to meet climate targets, and that means they need to learn new skills to future-proof their careers.
Companies that can offer exposure to green energy projects or training will be particularly attractive to talent. This rings especially true for younger candidates who understand that the jobs they hold today will likely be significantly different in the near future.
By helping candidates learn these new skills through formal training, mentoring from experienced staff, and exposure to green energy projects, employers can attract the best talent, while also diversifying their business.
2024 oil and gas talent trends
With many new projects going live in 2024 we expect recruitment activities to increase, with strong demand from new sectors such as hydrogen and emerging job roles that harness artificial intelligence (AI) and big data to improve accuracy and efficiency.
The transition to green energy remains very much in its infancy, and talent with exposure to these projects remains high in demand. Talent with experience on how to integrate renewable energy projects into existing operations will be highly sought after as companies transition towards clean energy while maintaining momentum with their existing portfolio.
We expect salary trends for 2024 to be broadly in line with what was observed in 2023. Candidates staying with the same company can expect an average salary increment of between 5% and 15%, depending on company performance. Those switching to a new employer can expect a salary increase of 15% to 25%.
employers must strategise to attract talent
Today, talent tends to be more risk-averse in view of global pressures, prioritising job security and being less keen on switching employers. This trend is particularly true in upstream exploration and production as more projects come to fruition, providing less incentive for employees to change jobs. Meanwhile, companies securing contracts on downstream EPCC projects may find it easier to attract candidates wanting to work on new and exciting projects.
For employers that can afford it, salary is an obvious draw, but flexible working arrangements for office-based roles remain in demand. We have seen candidates accept a lower salary in exchange for the flexibility to work remotely.
Candidates are also seeking exposure to big projects, particularly in renewable energy. Companies which are unable to offer this benefit may compensate with a strong learning and development programme that gives candidates the chance to develop new skills, particularly in green and transition energy.
the most in-demand oil and gas roles in 2024
These are the top 3 most in-demand careers in oil and gas in 2024:
- Digital oilfield technologies, in particular data analytics; using machine learning and AI for predictive modelling; and using digital twins to create virtual replicas of physical assets for better monitoring and optimisation
- Geoscience and reservoir modelling, especially cutting-edge reservoir simulation skills; integrated reservoir management incorporating geological, geophysical, and engineering data; and understanding of rock physics to help make better exploration and production decisions
- Renewable energy integration, particularly incorporating renewable energy into traditional operations; and experience in energy storage to help counter the varying output of many renewable solutions
download malaysia’s oil and gas industry 2024 market and salary outlook report.
The 2024 Randstad Malaysia Market and Salary Outlook report looks at talent analyses, key trends and new salary benchmarks in the following industries:
- Emerging technology
- Human resources and legal
- Oil and gas
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