Malaysia’s national oil company,
Petroliam Nasional Berhad (“
PETRONAS”) published the
PETRONAS Activity Outlook 2024 – 2026 report (“
Outlook Report”) in December 2023 as part of PETRONAS’s ongoing effort to increase engagement with the Oil and Gas, Services and Equipment (“
OGSE”) sector.
The Outlook Report highlights the key focus of energy sectors in the areas of Energy Security, Energy Efficiency and Energy Transition, in upstream business, downstream business and gas business with challenges and opportunities in each of these areas being discussed.
The Outlook Report has also addressed PETRONAS’s initiatives in upholding the Government’s commitment under the National Energy Transition Roadmap (“
NETR”) and the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2022.
Upstream Business
The Outlook Report highlights PETRONAS’s view that the upstream oil and gas industry in Malaysia remains resilient in the wake of a healthy rebound following COVID-19 pandemic as illustrated by the success of the bid rounds conducted by Malaysian Petroleum Management (“
MPM”), with close to 80% of Malaysia’s acreage having been awarded in the form of production sharing contracts. A production target has been set to produce two million barrels of oil equivalent per day (MMboe/d) by 2025 and beyond which will see Malaysia overtake Indonesia as the largest producer in the region. The drivers in achieving this target will be the successful implementation of key projects such as Kasawari, Jerun, Rosmari-Marjoram and Lang Lebah in Sarawak, Gumusut-Kakap Redev and Belud Clusters in Sabah, and Bekok-Oil Redev, Tabu Redev and Seligi Redev in Peninsular Malaysia, amongst others.
In the coming three years, more than 25 wells are forecasted to be drilled each year with a focus on shallow water plays within Peninsular Malaysia and Sarawak, and deepwater wells in Sabah. During the same period, more than 45 upstream development projects are expected to be executed: four Central Processing Platforms (“
CPP”) to be fabricated, three onshore facilities are to be constructed and approximately 1,130 km of pipelines are to be installed. To sustain production volume and operationality of the producing assets, about 300 Facilities Improvement Plans (FIPs) have been planned to be carried out annually for the next three years, including rejuvenation projects, gas turbine and gas generator charge-out activities etc., which contribute to curb flaring activities. Another significant aspect of upstream operations is the decommissioning activities for matured assets – for the next three years, decommissioning and abandonment plans of about 130 wells and facilities have been forecasted.
The continued growth of Malaysia’s upstream sector hinges on the combined efforts of the Petroleum Arrangement Contractors, OGSE and business partners, and that PETRONAS
via MPM is open to fostering more extensive partnerships with all players in upstream operations to achieve a secure, resilient, cost effective and lower-carbon future.
Downstream Business
PETRONAS’s downstream business traditionally is anchored on refining, marketing and trading crude oil and petroleum products, along with manufacturing petrochemicals and specialty chemicals. As part of the effort to expand downstream business into cleaner energy initiatives, PETRONAS is venturing into biofuels, circular economy, Liquified Natural Gas (LNG) bunkering and next-gen fluids with PETRONAS Iona Range and the installation of electric vehicle (EV) charging facilities at PETRONAS stations. In strengthening EV charging facilities portfolio, PETRONAS Dagangan Berhad has introduced two battery swap stations for electric two-wheelers and seeks actively for strategic collaboration with industry players to grow the EV charging business.
Another focus areas of PETRONAS’s downstream business are fuel innovation and biofuel production through greenfield biorefinery and co-processing at existing facilities. With used cooking oil (UCO) as main feedstock, PETRONAS targets to demonstrate capability to produce sustainable aviation fuel (SAF) and Hydrogenated Vegetable Oil (HVO) and renewable diesel – such initiatives are aligned with the Carbon Offsetting and Reduction Scheme set by the International Civil Aviation Organisation (ICAO) to reduce the impact of carbon footprint in the international aviation sector.
Energy Transition
The Malaysian Government sees significant opportunities in energy transition as a whole-of-nation approach that is result-oriented. As Malaysia’s oil and gas custodian, PETRONAS has continuously demonstrated support to decarbonise economic development, and such commitments are prescribed in the PETRONAS NZCE 2050 Pathway. In addressing emission reduction, the Net Zero Carbon Emission 2050 Pathway prescribes four main levers: Zero Routine Flaring and Venting, Energy Efficiency, Electrification and Carbon Capture And Storage (CCS).
In supporting Net Zero Carbon Emission 2050 Pathway and the NETR, PETRONAS has set the following targets: