To optimise and develop Malaysia’s petroleum resources, MPM plays a role to offer and award oil and gas blocks to qualified businesses through MBR.
Malaysia is rich in natural resources, including oil and gas, the primary source of energy necessary for daily life across the globe.
Through strategic planning in monetising the oil and gas resources, Malaysia has enjoyed long run successes in the exploration, development and production of oil and gas resources, with rapid economic development and positive socioeconomic impact to the nation.
The country’s early oil and gas exploration activities began after the discovery of the first oil in 1910. During those years, foreign companies were operating under the concession arrangement in return for royalties and tax payments to relevant government.
The enactment of the Petroleum Development Act 1974 vested the rights of exploring, exploiting, winning and obtaining hydrocarbon resources in Malaysia to a corporation, Petroliam Nasional Berhad (PETRONAS) which was incorporated under Companies Act 1965.
Petronas then renegotiated the concession arrangements and awarded the Production Sharing Contracts (PSC) to the foreign companies. Malaysia subsequently became a net exporter of oil for the first time in 1976 and Petronas has since established itself as an integrated energy company, fulfilling the country’s aspiration to be self-reliant on its national hydrocarbon resources.
Today, Malaysia has vast undiscovered potential of hydrocarbon resources which is estimated at 21 billion barrels of oil equivalent. In playing the role of regulating, shaping and enabling country’s upstream oil and gas industry,
Petronas through a unit known as Malaysia Petroleum Management (MPM), ensures that these potential resources are monetised in strategic and optimal manner. Driving foreign investments to Malaysia’s upstream landscape, MPM organises the annual Malaysia Bid Round (MBR), offering oil and gas blocks and awarding PSC to the right and qualified companies.
MPM also ensures that these investors carry out the operations of exploration, development, and production of oil and gas in accordance with good and modern international standards of petroleum field practices.
Since 1974, Malaysia’s oil and gas industry has grown tremendously, with an accumulated investment worth RM650 billion up till 2021, and the oil and gas production are estimated to reach about 1.6 million barrels per day.
Through MBR 2021, Petronas has successfully awarded six of the 13 exploration blocks offered to existing oil and gas companies as well as new investors, such as subsidiaries of PTTEP, Shell, SK Innovation, Petros as well as OMV and Sapura joint venture company. These companies will then execute the exploration, development, and production activities in the contracted oil and gas fields based on the agreed PSC terms.
Currently, there are more than 30 oil and gas contractors in Malaysia including leading international companies such as ExxonMobil, Shell, TotalEnergies and Hess.
In addition, there are also competitive local oil and gas companies such as PETRONAS Carigali, Vestigo and SapuraOMV, alongside state-owned enterprises in the likes of Petros and Sabah International Petroleum. All these oil and gas contractors contribute long term capital investment, its niche capability and advanced technology playing a big part in realising Petronas’ strategic plans towards sustaining a vibrant upstream industry landscape in Malaysia.
As the nation’s source of pride, Petronas, is Malaysia’s sole Fortune Global 500 company that continues to uphold its position as the key pillar of the country’s economy.
The capabilities and effectiveness of Petronas in developing the country’s oil and gas industry over the years, have yielded various benefits to the country.
Malaysia’s oil and gas industry has witnessed commendable growth since 1974 with accumulated investments exceeding RM650 billion up to 2021. The country’s oil and gas current production level stood at an estimated 1.6 million barrels of oil equivalent per day despite being impacted by the global Covid-19 pandemic and volatile oil prices.
Petronas’ role in maintaining a stable and conducive investment landscape for the upstream sector is imperative in stimulating the country’s economic growth and multiplier spin-offs. This includes the development of local oil and gas equipment and services ecosystem that is competitive not only domestically but internationally. There are currently more than 4,000 vendors licensed with Petronas for the upstream industry.
The oil and gas industry- from end-to-end value chain of upstream, midstream and downstream activities-will undeniably continue to contribute to the nation, most notably through its contribution to the nation’s coffers and human capital development for long-term and sustainable socioeconomic development.
from Borneo Post Online https://bit.ly/3EvQ5fX
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