KUALA LUMPUR: Malaysia is expected to remain a key area for investments in the oil and gas sector, particularly in upstream activities, decarbonisation and energy transition projects, according to BMI Country Risk and Industry Research (BMI).
In a statement, the Fitch Solutions Group company anticipated that the upstream sector in Asia would remain robust, driving capital expenditure (capex) growth for exploration and production activities.
“Despite a lower oil and gas price environment, the majority of capital spending will continue to focus on upstream exploration and production,” it said.
According to BMI, PETRONAS Carigali Sdn Bhd is expected to maintain stable capex of around RM50bil for this year, given the investment requirements for several greenfield and brownfield projects through between this year and 2027.
In the upstream segment, it noted that PETRONAS plans to ramp up the drilling of development wells, raising the number of wells from 56 last year to 73 wells this year.
“Last year, PETRONAS signed 14 production sharing contracts (PSCs) with local and foreign companies and held equity stakes in certain PSCs,” it said.
BMI said that capital requirements for overseas projects are expected to rise since the company secured new oil and gas blocks for exploration in Suriname last year.
“PETRONAS signed agreements for upstream assets in Angola, Indonesia, Brazil, the UAE and Oman,” it added.
Last August, PETRONAS, Abu Dhabi National Oil Co and Britain-based Storegga signed a joint study and development agreement to explore the construction of carbon capture and storage opportunities in the Penyu Basin located off the east coast of Peninsular Malaysia.
The agreement covers investments to store five million tonnes of carbon dioxide per year by 2030, including shipping and logistics.
“In the long term, PETRONAS will need to allocate higher capex for the development of Indonesia’s Masela liquefied natural gas project, in which Petronas holds a 15% equity stake,” BMI added. — Bernama
