PETALING JAYA: Local oil and gas companies will still cut their capital expenditures (capex) this year as demand for the commodity remains gloomy amid the Covid-19 pandemic.
AmInvestment Bank pointed out that for the first half of 2020 (1H2020), the new contract awards to Malaysian operators dropped 62% year-on-year (y-o-y) to RM2.2bil, with the worst fallout yet to come in 2H2020 onwards.
It added that even though a measure of optimism has returned for crude oil prices, oil producers were expected to proceed with their planned production cuts this year given that demand globally remains depressed amid prolonged movement restrictions and social distancing measures across the new normal.
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