A report by the French Trade Commission - Business France Malaysia (December 2019)

General overview

Malaysia is the second-largest crude oil producer in ASEAN-Oceania after Indonesia. For gas production, Malaysia stands out in LNG, of which it is the 3rd largest exporter behind Qatar and Australia.
Many international companies have chosen Malaysia as the location for their regional headquarters to develop strategic segments such as drilling, engineering, manufacturing and installation of offshore platforms and other maintenance operations.

The country's energy security has been further strengthened by continuous investments in the oil and gas sectors: installation of the world's first floating liquefaction unit off the coast of Bintulu 
(Sarawak), Terminal 2 for regasification and Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor.
The project attracted a Saudi investment of 7 billion USD, the largest coming from a foreign company in RAPID. Third-Party Access (TPA) was introduced in 2016 allowing third parties to use gas supply infrastructures such as regasification terminals, transmission and distribution pipelines.


Key players 

PETRONAS: A multinational public company which owns all of Malaysian’s oil and gas fields since the 1974 Petroleum Development Act, except those which are located in the state of Sarawak (Borneo). Exploration and production are carried out by PETRONAS alone or in association with foreign companies through “production sharing contracts” (PSC).
Today there are over a hundred of PSC contracts;

PETROS: A  state company of Sarawak, holder of the full rights of oil and gas exploration in Sarawak. Since July 1, 2018, all explorations and production licenses have been insured by PETROS in the form of PSC, in association with PETRONAS or with other foreign companies;

OTHER OPERATORS (PSC): The major international groups are all present on in the Malaysian market and on a “PSC” contracts with PETRONAS: Shell, Total, Exxon, Hess, Talisman, Nippon Oil, Murphy, Lundin, Petrofac etc.



  • Upstream

Average production of approximately 1.7 M boe / day is forecast over the next five years.
The Upstream sector in Malaysia has projects focused on developing new growth areas (Greenfield Projects) and optimizing recovery on mature sites (Brownfield Projects).
The objective of the operators being at least to maintain the desired level of production.

  • Downstream

The operation of Refinery and Petrochemical Integrated Development (RAPID) activities will increase refining capacity beyond 900,000 barrels per day. In addition, the storage capacity of crude oil and petroleum products at the Pengerang Integrated Petroleum Complex (PIPC) will increase from 1.3 million cubic meters to 3.2 million cubic meters by 2020. These efforts will allow Malaysia to increase its production of higher value-added petroleum products for the domestic and export markets.

  • Refinery

PETRONAS has a refining capacity of 546 kbpd, of which 446 comes from its national activities and the rest from Durban, in South Africa.
PETRONAS’ refineries of Terengganu and Melaka were designed to produce petroleum products such as gasoline, diesel and Jet A-1. PETRONAS is also committed to support clean fuels programmes.
With the development of the Pengerang Integrated Complex (PIC), the refining capacity will reach 220 kb / d of petroleum products.

  • Petrochemistry

PETRONAS is one of the largest producers of chemicals in Southeast Asia, with a production capacity of 12.7 million tonnes per year. The national company is mainly involved in the manufacturing, marketing and sales of a wide range of petrochemical products including olefins, polymers, fertilizers, methanol and other chemicals and petroleum products.
With the completion of Pengerang Integrated Petroleum Complex (PIPC), petrochemical capacity will increase by 3.3 million mtpa, with a production of petroleum products and speciality chemicals.
Beyond 2020, PETRONAS CariGali plans to develop its current activity by at least 25% by optimizing its existing assets and developing its downstream activities.

  • Natural gas, from processing to distribution

PETRONAS is the main gas company with activities across the entire value chain, from processing to distribution. They produce ethane, propane and butane for customers. This treated gas is transported via the PGU (Peninsular Gas Use) pipeline network to gas consumers in Malaysia and Singapore. PETRONAS also operates regasification terminals in Sungai Udang, Melaka and Pengerang, Johor. The operator also supplies industrial gases to the Kertih Integrated Petrochemical Complex in Terengganu and to the Gebeng Industrial Zone in Pahang.
The new LNG regasification terminal in Pengerang is a strategic growth project for Petronas Gas Berhad (PGB). It supplies the fuel requirements of the Pengerang cogeneration plant (PCP), one of the six associated facilities, as well as the entire Pengerang integrated complex (PIC).

  • Technical shutdowns/upgrades of production units

These planned interruptions of the production units are essential to carry out maintenance, modernization, extension or cleaning work.
The rehabilitation relates not only to the mechanical works which constitute the main part of the activities (approximately 60%) but also on the electrical equipment, instrumentation, rotating equipment, etc.
These stops require a large workforce.
This activity offers interesting potential because the upgrading activities should increase from 2022 in order to meet the needs of RAPID.
Excellent opportunity for collaboration between players in the sector and foreign investments to strengthen local capacities.


Key figures

Market size 5% of global production
Oil Production 744 000 barrels/day
Gas production 1 074 000 barrels/day



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