Malaysia’s Petronas is Looking Near and Far for Gas and Oil

Abstract

Petronas is looking within its home country, around Southeast Asia, and to the Americas in an effort to maintain its forecast average yearly production of 1.7 million BOE/D over the next 5 years. It is also exploring new partnerships with other global operators that offer regional and technical expertise.  The integrated company, whose upstream portfolio consists primarily of natural gas, wants to both accelerate its exploitation of the hydrocarbon and add more oil to the mix.   Back home, Petronas—the world’s third-largest LNG seller—continues to target domestic gas to leverage its control of the gas value chain all the way to its petrochemical and LNG liquefaction plants. The company’s LNG facilities include its 30-million tonnes/annum (mtpa) complex in Sarawak, and the world’s first floating LNG facility, the 1.2-mtpa PFLNG Satu. A second floating LNG facility is expected to be ready for sail away by 2020. Petronas is taking advantage of a growing Southeast Asia gas market, counting Japan, Korea, Taiwan, “and increasingly China” as major LNG customers, said Adif Zulkifli, Petronas executive vice president and chief executive officer of gas and new energy, on the sidelines of a recent SPE forum in Kuala Lumpur. Adif said one of Petronas’ primary goals is to turn Malaysia’s large inventory of contingent resources into proved reserves. The company has worked “to intensify exploration activities in Malaysia,” and it is seeking to bring more partners into the fold: The country recently revised terms in its deepwater production-sharing contracts to attract more international participation. “We are quite progressive in terms of attracting investment, and that has brought in some new plays into the space,” he said. Adif believes “there is much potential within the deep waters of Sabah that is still left untapped and remains very attractive to investors.” Last year, the Total-operated Tepat-1 well in deepwater Sabah tested a frontier Miocene carbonate buildup “and is believed to have found oil and gas, though commerciality is uncertain and the results are being kept very tight,” according to a report from research consultancy Westwood Global Energy. “Tepat demonstrates that explorers are still testing new plays in the region and that a breakthrough could yet happen.” Elsewhere in Southeast Asia, said Adif, the company hopes to soon monetize its operated deepwater Kelidang cluster project off Brunei, continue exploratory work on the recent onshore Sakakemang discovery in Indonesia, and improve recovery from its Yetagun block off Myanmar. Petronas farmed in to the Sakakemang block in January, a month before operator Repsol announced the discovery, which comes with a preliminary estimate of 2 Tcf in recoverable resources. Petronas also intends to explore the deepwater Moat-tama Basin off Myanmar and frontier areas off East Indonesia, he added.