Malaysia’s national oil company, Petronas, has laid out an expansive three-year activity roadmap that reinforces its commitment to domestic oil and gas production, liquefied natural gas (LNG) leadership, and carbon reduction initiatives, even as it positions itself for a lower-carbon future.
In its Activity Outlook 2026–2028, Petronas said it will continue investing across the upstream, downstream, and gas and maritime segments to keep national production close to two million barrels of oil equivalent per day, while advancing carbon capture and storage (CCS) as a future revenue stream.
The upstream segment remains central to Petronas’ strategy. Between 2026 and 2028, the company plans to intensify exploration in both new and mature basins, accelerate appraisal of recent discoveries, and prioritise projects that can deliver resilient, low-cost barrels.
Key developments include the Belud, Kurma Manis, and Sepat clusters, alongside brownfield and greenfield projects aimed at sustaining base production and improving recovery rates. Petronas is also advancing enhanced oil recovery (EOR) techniques and deepwater developments to offset natural field declines.
Recent discoveries such as Lebah Emas-1, drilled near the mature Duyong field, highlight renewed exploration potential in Malaysian waters. Petronas has framed the find as evidence that legacy basins can still yield meaningful volumes with improved geological understanding.
At the same time, upstream operations are being redesigned to align with the company’s Net Zero Carbon Emissions by 2050 pathway. Carbon abatement is being embedded directly into project design, with CCS hubs positioned as both a decarbonisation tool and a long-term commercial opportunity. Petronas has explicitly stated its ambition to establish Malaysia as a regional CCS hub, a move that mirrors broader regional interest in storage-led decarbonisation.
Natural gas and LNG form the backbone of Petronas’ medium-term transition strategy. Domestically, the focus remains on ensuring energy security by optimising existing infrastructure, including the Bintulu LNG complex and floating LNG (FLNG) units.
Looking ahead, Petronas plans to expand regasification capacity, add a third FLNG facility, and upgrade pipeline networks. Internationally, the company is progressing LNG growth projects in Canada and Suriname, while diversifying supply through imports from Australia and, longer term, the Middle East.
The gas portfolio is increasingly framed as a bridge in the energy transition, supporting power generation, industrial growth, and Malaysia’s expanding digital economy. In maritime operations, Petronas is targeting a 50% reduction in shipping greenhouse gas intensity by 2030, including through alternative fuels and green shipping technologies.
Downstream operations over the 2026–2028 period will prioritise operational reliability and efficiency, reflecting lingering volatility in global refining and petrochemicals markets. Plant turnarounds, pipeline inspections, and maintenance programmes are expected to drive consistent contracting activity.
Over the medium to long term, Petronas aims to strengthen its chemicals and specialty products portfolio. Through Petronas Chemicals Group, the company is pursuing higher-value specialty chemicals and biofuels, including a biorefinery project scheduled to come online in 2028 that will produce sustainable aviation fuel and renewable diesel.
The outlook underscores Petronas’ balancing act: sustaining hydrocarbons output critical to Malaysia’s economy while incrementally reshaping its portfolio toward lower-carbon energy. Unlike international peers that are pulling back from upstream spending, Petronas is signalling continuity—anchored in domestic supply security and regional LNG demand growth.
For service providers and investors, the roadmap points to steady upstream and offshore activity in Southeast Asia, continued LNG infrastructure buildout, and early-stage CCS opportunities that could define the region’s decarbonisation landscape in the 2030s.
By Charles Kennedy for Oilprice.com
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