PETALING JAYA: Petroliam Nasional Bhd (PETRONAS) seeks to sustain domestic hydrocarbon production close to two million barrels of oil equivalent per day (boe/d), amid maturing fields, rising costs and growing energy security concerns.
According to the “PETRONAS Activity Outlook 2026-2028”, the national oil company is continuing investments in exploration, deepwater developments, enhanced oil recovery (EOR) and new production sharing contracts awarded under the Malaysia Bid Round 2024 to defend output and strengthen energy security.
The intensified activity comes against a challenging global backdrop.
“Energy security is competing with energy transition as nations seek to decarbonise while still ensuring access to energy and prioritising affordability,” PETRONAS said in the report, adding that policy shifts, geopolitical tensions and cost pressures have heightened volatility across the energy landscape.
Despite these challenges, PETRONAS said disciplined portfolio management enabled the group to deliver RM320bil in revenue in 2024. In the upstream segment, PETRONAS said its near-term priority is to revitalise Malaysia’s exploration and production landscape, intensifying exploration in both new and mature areas and accelerating appraisal of recent discoveries.
“Key projects such as Belud, Kurma Manis and Sepat will play a pivotal role in meeting production targets,” it said.
A major highlight is the Lebah Emas-1 discovery offshore Peninsular Malaysia in Block PM6/12, which “revealed a new geological play near the mature Duyong field, challenging long-standing perceptions of Malaysia’s upstream potential”.
“The find not only adds valuable hydrocarbon resources to the nation’s reserves but also showcases PETRONAS’ continued commitment to innovation and exploration excellence,” it said.
Looking ahead to the medium and long term, PETRONAS said upstream operations are committed to safeguarding production supply while embedding decarbonisation across the value chain.
“The business will reshape operations to remain competitive in a low-price environment, ensuring projects deliver positive returns even under challenging market conditions,” it said.
“Financial discipline, accelerated cash generation and capital efficiency will be key priorities in delivering low-cost, lower-carbon and high-margin barrels.”
Central to upstream execution is the Capital Project Investment Destination (CAPE) Masterplan 2030, which among others, aims to deliver regional top-quartile project performance and cut the discovery-to-monetisation cycle to 50 months.
PETRONAS said the strategy emphasises optimisation over new asset deployment, including reassessing lifecycle costs and maximising efficiencies from its existing floating production, storage and offloading (FPSO) and floating, storage and offloading (FSO) fleet. It said that fabrication yards also play a pivotal role in the successful execution of upstream projects, and benchmarking efforts have helped identify opportunities to further strengthen productivity and planning.
“In support of this advancement, PETRONAS introduced the Malaysia Yard Productivity Target, aiming for a 30% productivity improvement by 2030,” it said.
The CAPE Masterplan also promotes data-driven project delivery, with digital platforms to enhance visibility, coordination and control across the project lifecycle.
Operationally, PETRONAS’ upstream footprint includes 405 offshore platforms, over 3,000 wells and a fleet of FPSOs, FSOs and floating liquefied natural gas (FLNGs). Its floaters asset base includes eight FPSO units, nine FSO units, five mobile offshore production units (Mopus), two FLNG facilities and several other specialised structures.
Seismic activity is expected to peak in 2026, with eight 2D and 3D seismic acquisition campaigns planned, compared with three in 2025.
Activity moderates thereafter, with four campaigns each in 2027 and 2028, as exploration shifts from acquisition to appraisal.
Drilling activity is projected to remain elevated, with total wells rising from 142 in 2025 to 161 in 2026, before stabilising at 180 wells annually in 2027 and 2028.
Rig utilisation is also expected to stay firm, with rig numbers increasing from 21 in 2025 to 24 by 2028, dominated by jack-up rigs to support shallow-water developments.
In downstream, PETRONAS said its short-term focus is on enhancing operational efficiency and reliability to capitalise on global petroleum market recovery, while navigating chemical industry volatility.
“Over the medium to long term, the focus shifts to achieving operational and commercial excellence across refineries and chemical plants,” it said.
For gas and maritime, PETRONAS said it will prioritise Malaysia’s energy supply by leveraging existing infrastructure and LNG facilities, optimising operations at Bintulu and FLNG units, and exploring value-added options such as vessel conversions.
Longer-term plans include expanding regasification, adding a third FLNG facility and accelerating decarbonisation through green shipping technologies.
PETRONAS stressed that a resilient oil and gas services and equipment (OGSE) sector is fundamental to delivering energy security and executing its transformation strategy.
The OGSE industry contributes between 5% and 8% of Malaysia’s gross domestic product and is expected to contribute RM40bil to RM50bil by 2030 under the National OGSE Industry Blueprint 2021-2030, positioning it as a significant component of the national economy, supporting the oil and gas value chain through approximately 4,000 vendors.
“The health and competitiveness of Malaysia’s OGSE sector is not ancillary to our mission – it is fundamental to it.” it said.
“A resilient, innovative and globally competitive OGSE ecosystem directly determines our ability to deliver energy security, execute our transformation strategy, and maintain Malaysia’s relevance in a rapidly evolving global energy landscape.”
