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Will Kuala Lumpur Become the ‘Houston of Asia’?

Helped along by a stable, transparent, pro-business government, Malaysia has been quietly building itself into an oil and gas hub, and the world’s oil and gas companies -- who increasingly see this country as a natural base for their broader Asian operations -- have noticed.

With Singapore now the world’s most expensive city, Jakarta in constant gridlock and Bangkok the center of recurring coup activity, Kuala Lumpur is fast becoming the preferred central location for businesses looking to take advantage of the expected growth in South East Asia.

The South East Asian market holds great importance for oil and gas firms due to its location in the center of the Asian-Pacific; some estimates are that it will account for 70 percent of global oil demand from 2015 to 2020.

Related: Petronas Threatens To Scrap Canadian LNG Terminal Over Tax Rates

The region will also be boosted by the development of both onshore and offshore gas markets driven by growing regional demand and high gas prices in Japan and South Korea, which could see shallow water drilling grow 29 percent between now and 2020.  

In addition, next year there will be an increase in development wells drilled offshore in the region: Thailand will drill some 370, followed by China and India, each of which will drill around 200. The regional total by 2020 will be 1,600 wells -- a growth of more than 30 percent over 2014.

To manage these opportunities effectively, a robust Asian Pacific central hub is considered crucial, and with Malaysia’s strong pedigree in training, the full range of oil and gas skills, operators, engineering firms, oil field service companies, and consultancies are rushing to expand in Kuala Lumpur.

Related: West Texas Now the Heart of America’s Oil Boom

Malaysia Petroleum Resource Corporation (MPRC) is also driving this growth by recommending appropriate policies relating to the oil and gas sector as it reviews existing business regulations and tax incentives. With 4,446 international and domestic companies registered with the state oil and gas company PETRONAS  (Petroliam Nasional Berhad) that already contribute 20 percent to Malaysia’s GDP, this has the potential to be huge.

EarthStream predicts Malaysia could be the hottest oil and gas job market in 2015, and over time, it could well become the “Houston of Asia,” with career opportunities for expats and locals alike.

The real winners in all of this will be the returning Malaysians, whose skills are in extreme demand. Already, companies are putting employment packages together to attract local workers back from their tax-free assignments in the Middle East.

By Kevin Gibson of Earthstream

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  • Roy Hogson on October 18 2014 said:
    "KL to become Houston in Asia", isn't it a little misplaced?
    Houston or any city in Texas can never match the development going on in KL. But yes, we are talking about oil & gas.
  • Primila Edward on October 15 2014 said:
    Malaysia to become the "Houston"of Asia must attract enough people with the right skill sets to support the companies that intend to set up or grow their business in oil and gas here. I envisage this to be the main hurdle to get over. The infrastructure is more or less in place or being put in place.
  • Bobby Grimes on October 10 2014 said:
    Us service industry types have long considered KL, Calgary, and Aberdeen to be sister cities with Houston as primary O&G centers of technology etc.

    Cheers,

    Bobby Grimes
    Houston, Texas

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