PETROLIAM Nasional (Petronas) and 300 other oil and gas companies in Malaysia must intensify oil and gas exploration and production activities as reserves are becoming scarce and new players from all over the world are entering the country’s oil fields.
Petronas executive vice-president for exploration and production business Datuk Wee Yiaw Hin says the era of easy oil and gas business in Malaysia is over and now leading towards a more challenging environment.
In order to sustain the oil production level, he says Petronas has to get more from the existing fields and unlock stranded resources. “We need to bring in global technology and capability as we are embarking on deep-water sector exploration to assist us,” he says at a plenary session titled “Making Malaysia as regional oil and gas hub” on the sidelines of Invest Malaysia 2011.
Wee says Petronas will continue to undertake aggressive efforts and develope innovative solutions to drive reserve growth and monetisation. He also says that the industry players should look into increasing their capabilities and expertise in the marginal oil field and sub-surface technology.
Meanwhile, Sapura Group president and chief executive officer Datuk Shahril Shamsuddin says local players need to be competent to bid and gain oil and gas projects.
He says Sapura itself had established high standards of expertise and capabilities before embarking on project tenders.
“We need to have the capabilities first before opportunities come,” he says.
Performance Management and Delivery Unit associate director Dr Shahreen Madros says to sustain Malaysia’s oil and gas, companies must continue to bolster production activities, develop small fields and enhance export activities. To become a regional champion, they must grow in the downstream sector, create regional oil and gas storage, and set up trading hubs.
The industry must also enhance presence of multinational corporations and partner with world-class oil and gas companies.
Malaysia will set up an agency to spur the development of its oil and gas industry, the Malaysian Reserve newspaper reported.
The interim chief executive officer of the new agency which will be known as the Malaysian Petroleum Resource Corp (MPRC), Shahreen Madros, says the body would be placed under the control of the Malaysian Industrial Development Authority.
“We are looking at human capital requirements, marketing and how we can promote the industry further,” Shahreen says, adding that Prime Minister Najib Razak would make an announcement “soon” on details of the MPRC.
A net oil exporter with flagging output, Malaysia produced 1.61 million barrels of oil equivalent per day (boepd) in the third quarter of 2010/2011, down from 1.64 million boepd output for the same period last year, according to national oil firm Petronas.
The Southeast Asian country has been trying to lure new energy investments. In January, the government says oil giants Exxon Mobil and Royal Dutch Shell would invest 15 billion ringgit ($4.9 billion) in new oil, gas and energy assets in the country.
Malaysia has 106 marginal oil fields, with 580 million barrels of oil and the government recently announced plans to tap into the wells. Malaysia oil and gas (O&G) companies including those with projects in the conflict-ridden Arab countries may be affected by the turmoil there, but their overall outlook remains bright, senior trade officials says.
Malaysia External Trade Development Corp (Matrade) deputy chief executive officer of trade and services promotion Dr Wong Lai Sum says contracts secured by Malaysian companies in countries like Libya will be affected by the unrest, but those with projects in other places in the Middle East are unaffected.
Domestically, she says, the outlook is favourable as projects under the Economic Transformation Programme will generate more businesses for local O&G players throughout the value chain.
“We have companies almost everywhere in the world, so our interest is diversified,” Wong told a media roundtable on O&G in Kuala Lumpur.
Also present were Malaysian Oil and Gas Services Council president Sofiyan Yahya and Matrade director of oil and gas and chemical Abu Bakar Koyakutty.
Wong expects the rising global oil prices to be temporary as the North African countries affected by the uprisings are not major oil exporting nations.
“Bearing in mind that the turmoil is only in Libya, Yemen and Syria, and has not gone into Qatar or Saudi Arabia, the impact (on the global oil price) will be transitional,” she says.
If the turmoil continues until year-end, Malaysia’s exports will be higher with double-digit growth, she added.
Last year, Malaysia’s O&G exports amounted to RM101.2 billion, up 24 per cent from 2009 – a growth attributed mainly to high oil prices. The exports grew at an annual average of 13.5 per cent in the past 10 years.
Wong says concerns over the turmoil in the region that spike global oil prices, would have positive impact on oil exporting countries. But it is otherwise on oil importers