Malaysia’s oil and gas (O&G) sector’s mergers and acquisitions (M&As) this year are expected to fall slightly to $5 billion (RM18 billion) from $5.7 billion last year.

Deloitte Malaysia Energy and Resources Leader, Nizar Najib, said some firms may have cashed out to launch acquisitions but the others may not have the means to undertake M&As due to depletion in their order books. "The acquisitions would likely be more domestic-focused as Malaysian firms were interested to consolidate locally," he told Bernama at the Deloitte South-East Asia Oil and Gas Summit 2015.

Nizar said companies might resort to M&As to revamp their operations and cope with rising costs.

"Oil field service companies facing pressure to reduce cost may see M&As as a way to enhance their capabilities and acquire new technologies," he said.

Earlier, speaking at a media briefing after the summit, Nizar said many companies might also look at M&As to take advantage of the low oil prices to re-strategise and acquire new capabilities although the same forces may cause some to sell assets at distress.

"Most companies aim to refocus on core competencies and divest non-core assets due to low oil price. It may also be an ideal time to strengthen those competencies by acquiring new technologies and capabilities," he said.