Companies in Sabah have seen a sharp increase in the value of oil and gas (O&G) contracts awarded to them, according to recent data. Local vendors in the state — once minor players in the industry — are now emerging as significant beneficiaries of major O&G deals.
Under a partnership between the Sabah state government and PETRONAS via the Commercial Collaboration Agreement (CCA), the participation of Sabahan firms in the contract ecosystem has surged.
Local vendors’ share of O&G contracts in Sabah has risen to 36% of the market — up from just 3% in 2018.
The total number of contracts awarded to Sabahan vendors jumped by 263% from 133 in 2021 to 483 by September 2025.
Corresponding contract values also climbed significantly. As of September 2025, the value awarded to Sabahan companies was about RM1.7 billion.
Over the three-year period from 2021 to 2024, Sabahan O&G service firms secured roughly RM2 billion in contracts, marking a ~229% increase from RM613 million in 2021.
State officials say the growth is a direct result of deliberate policies: tender thresholds, reserved work categories for local firms, technical partnership frameworks and mentorship programmes aimed at boosting Sabahan vendor capacity.
Moving forward, the state government has set a target to raise local companies’ market share to 60% by end of 2026, signalling an ambition to further localise the O&G supply chain and promote Sabah-based talent and firms.
In short: Sabah, once a peripheral player in Malaysia’s oil and gas services field, is rapidly growing into a major hub for local O&G participation — with more money, more contracts and more Sabah-based firms securing higher-value deals than ever before.
