The unresolved conflict involving Iran is expected to drive higher Sabah drilling activity in the coming months. That was the message from Labuan Chamber of Commerce (LCC) Oil and Gas Bureau chairman Masnawi Nawe on 15 May 2026, according to a Bernama report carried by the New Straits Times. His argument is straightforward. When the Gulf becomes unreliable, operators look elsewhere. Southeast Asia’s relatively stable producing basins move up the priority list.
That logic is already showing up in Malaysia’s own upstream planning. National oil company Petronas released its Activity Outlook 2026-2028 on 29 January 2026, signalling that more wells will be drilled in Malaysia from 2026 onwards than in 2025. Continued investment is planned in exploration, deepwater development and enhanced oil recovery. Sabah’s offshore portfolio sits squarely in that work programme, including the Gumusut-Kakap-Geronggong-Jagus East deepwater complex and the Belud cluster.
For Labuan, the implications of higher Sabah drilling activity are practical rather than abstract. The federal territory functions as the offshore support base for fields across Sabah, Sarawak and parts of the wider South China Sea. When more wells get drilled, more vessels, crew rotations, supply runs and maintenance scopes flow through that infrastructure. The chain of activity reaches well beyond the rigs themselves.
“Labuan is not only supporting nearby offshore fields, it is also part of the wider offshore support chain for vessels, drilling contractors and service providers operating in regional waters,” Masnawi told Bernama. His point landed alongside a practical warning. Local players should be readying assets, workforce and compliance standards now, rather than waiting for the work to arrive. He noted that more oil and gas personnel involved in drilling support, marine services, logistics and offshore maintenance were already visible on the island.
The timing matters because Malaysian oilfield services and equipment (OGSE) contractors have spent the last few years navigating a soft cycle. Petronas’ updated outlook, paired with sustained geopolitical risk premiums on Middle East supply, points to a window of opportunity that may prove narrow. Whether that window translates into durable revenue depends less on the headline drilling count than on which contractors are ready when the rigs arrive.
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