Almost all of Malaysias existing oil and gas fields are located offshore. Since 2005, Sarawak has been the largest producing state in Malaysia, with production at almost 4.0 bscfd, most of which went to LNG production in Bintulu. The recent discoveries of several new significant fields offshore Sarawak is expected to enable the state to maintain its dominance as the country’s largest producer of natural gas for the foreseeable future.

Country Key Facts

Oil reserves

In 2023, Malaysia had proved oil reserves of 2.7 billion barrels - the second-largest oil reserve in the Southeast Asia. Although reserves have declined since 2022, there were 19 new discoveries in 2023, which could add over 1 billion barrels of oil equivalent, according to Petronas. Of these discoveries, 16 are located in the Sarawak state, and 3 are in the Sabah state.

Following the Malaysia Bid Round 2023 (MBR 2023), six production sharing contracts and one discovered resource opportunity (DRO) were awarded. A DRO is an opportunity where a company can obtain the rights to an undeveloped discovery from a government to invest in its development. All offshore blocks for MBR 2023 in Sarawak and Northwest Sabah Basins are now licensed as a result of this bid round.

From 2024 through 2026, Petronas expects more than 25 wells (oil and natural gas) to be drilled per year. The Penisular Malaysia and Sarawak will be the focus of shallow water wells, and deepwater wells will be in Sabah.

Malaysia’s petroleum and other liquids production declined from 2017 to 2023—to 597,000 barrels per day (b/d)—due to maturing fields.

Natural Gas

At the end of 2023, Malaysia had proved natural gas reserves of 32 trillion cubic feet (Tcf). Although lower than the 2014 peak of 101 Tcf, reserves have increased since 2018 as a result of new discoveries.

Malaysia’s natural gas production increased in 2022 to an all-time high of 2.7 Tcf, 18 which was the result of developing both brownfield and greenfield projects.

Energy transition

In the 12th Malaysia Plan (2021–2025), the government outlined its plan to reduce carbon intensity economy-wide by 45% from 2005 levels against gross domestic product (GDP) and to achieve net-zero greenhouse gas emissions by 2050. To support these goals, Petronas plans to cap operational emissions at 49.5 million metric tons of CO2 equivalent in its Malaysian operations by the end of 2024. Petronas and its subsidies has also targeted a 50% reduction from 2019 levels in methane emissions from its natural gas value chain by 2025. 

Malaysia-Thailand Joint Authority (MTJA)

 
A Memorandum of Understanding (MOU) was signed in 1979 between the Governments of Malaysia and Thailand on the establishment of a Joint Authority for the exploration and exploitation of the resources of the seabed in a defined area of the overlapping claims of continental shelf of the two countries in the Gulf of Thailand for a period of 50 years.

Key Oil & Gas Players

ConocoPhillips

ConocoPhillips has varying stages of exploration, development and production activities across approximately 2.7 million net acres in Malaysia, with working interests in six production sharing contracts (PSC). Four of these PSCs are located in waters off the eastern Malaysian state of Sabah: Block G, Block J, the Kebabangan Cluster (KBBC), which they do not operate, and Block SB405, an operated exploration block acquired in 2021. The Company also operate another two exploration blocks, Block WL4-00 and Block SK304, in waters off the eastern Malaysian state of Sarawak.

EnQuest

The Group’s Malaysian operations include its PM8 Extension Production Sharing Contract, consisting of the PM8 and Seligi Fields.

PM8/Seligi
The PM8/Seligi asset has delivered strong production performance due to improved production efficiency, a focus on asset integrity and the successful idle well restoration activities completed, since the Group assumed operatorship and a 50% working interest in 2014.

A successful well workover campaign was executed during 2022 and the Group’s first horizontal wells at PM8/Seligi were also brought on stream during the year.  The Group, on behalf of the PSC parties, has agreed to provide associated Seligi gas for sale through existing infrastructure from 1 May 2023 and continues to evaluate opportunities for further development. 

ExxonMobil

CCS Project Development Agreements
In January 2023, PETRONAS signed two Project Development Agreements with ExxonMobil Exploration and Production Malaysia Inc. (ExxonMobil) to jointly pursue Carbon Capture and Storage (CCS) activation projects in Malaysia.

In July 2024,  it was reported that Exxon Mobil intends to transfer the operations of all assets of two production-sharing contracts in Malaysia to state energy company Petronas.

Hess

North Malay Basin
The North Malay Basin project consists of 10 discovered gas fields located 186 miles offshore Peninsular Malaysia that is tied to a gas terminal onshore. These gas fields are being developed on a phased basis to support energy demand in Peninsular Malaysia. Phase 1 of full field development achieved first gas in 2017, Phase 2 achieved first gas in 2019, and both Phase 3 and Phase 4 first gas were achieved in 2022.

Hess holds a 50% operated interest alongside Petronas.

JDA Block A-18
Block A-18 in the Malaysia-Thailand Joint Development Area (JDA) is located in the Malay Basin in the Gulf of Thailand about 93 miles from Kota Bharu, Malaysia and 161 miles from Songkhla, Thailand. Gas was discovered in 1971 and production began in 2005.

Hibiscus

In March 2018, SEA Hibiscus successfully assumed the role of operator of the North Sabah Production Sharing Contract (PSC) from Shell. As operator, SEA Hibiscus is responsible for the day-to-day operations, maintenance and conduct of production enhancement activities carried out on the asset.

In January 2022, the Company completed the acquisition and transfer of operatorship of three PSCs: Kinabalu Oil (Kinabalu), PM305 and PM314. Together with the PM3 Commercial Arrangement Area (CAA) PSC and Block 46 Cai Nuoc PSC acquired in the same transaction, these assets have brought about a step change to our oil and gas production volumes.

Discovery
In May 2024, Hibiscus Petroleum reported an oil discovery at the Malaysia–Vietnam PM3 CAA PSC. According to Hibiscus, the company successfully completed the drilling of the Bunga Aster-1 exploration well, ecountering approximately 17.5 metres of oil bearing sandstone with up to 46 metres of potential oil column.

INPEX

In January 2024, INPEX was jointly awarded Block SK510 as part of Malaysia Bid Round 2023 launched by Malaysia Petroleum Management (“MPM”), Petroliam Nasional Berhad (PETRONAS).

Block SK510 is the third exploration block awarded to INPEX in Malaysia following two exploration blocks awarded to the company in February 2023, being the 4E and SK418.

International Petroleum (IPC)

IPC holds a 100% working interest and operatorship in the Bertam field producing light high quality oil.

The Bertam field is located 170 kilometres offshore to the east of Peninsular Malaysia in Block PM307, at a water depth of about 74 metres. The field consists of an unmanned wellhead platform and 14 active horizontal wells producing to a FPSO. In 2022, IPC announced the extension of the Bertam field production sharing contract to August 2035.

Jadestone Energy

Jadestone's assets in Malaysia consist of four operated PSCs offshore Peninsular Malaysia, two of which are producing. Jadestone was recently awarded a 100% interest in the SFA Cluster redevelopment project, a cluster of previously producing oil fields in close proximity to its existing assets.

PM 323 PSC
Jadestone owns a 60% operated working interest in the PM 323 production sharing contract, which includes three producing fields: Chermingat, East Belumut and West Belumut, in water depth of approximately 72 metres, in the Malay Basin, offshore Peninsular Malaysia.

PM 329 PSC
Jadestone owns a 70% operated working interest in the PM 329 production sharing contract, which includes the producing East Piatu field, in water depth of approximately 63 metres in the Malay Basin, offshore Peninsular Malaysia.

PM428 PSC
As part of the Malaysia Bid Round 2023, Jadestone was awarded the PM428 PSC as operator with a 60% interest, with the joint venture partner being Petronas Carigali.

SFA Cluster PSC
In July 2024, through the Malaysia Bid Round Plus, Jadestone was awarded a 100% participating interest in a Small Field Asset Production Sharing Contract (the “SFA Cluster PSC”) offshore Peninsular Malaysia by Petroliam Nasional Berhad (“PETRONAS”), through Malaysia Petroleum Management.

JX Nippon Oil & Gas Exploration

Since the acquisition of Block SK10 in 1987 the project has been one of NOEX's key operations. JX Nippon Oil & Gas Exploration (Malaysia), NOEX's subsidiary acts as operator in the block and has been involved in the ongoing exploration and development, and the production of natural gas from the block. The natural gas produced, along with the natural gas produced from Block SK8, offshore Sarawak, which Hess acquired in 1989 is exported in the form of liquefied natural gas (LNG) to various countries including Japan.

KUFPEC

KUFPEC’s offshore projects in Malaysia include the two oil blocks: PM-304 and SK-304 in addition to SK-410B gas exploration block.

In February 2021, Kufpec announced a significant hydrocarbons discovery around 9km offshore Malaysia in the SK-410B Block which is operated by PTTEP (42.5%) alongside Kufpec (42.5%) and Malayia’s Petronas (15%). The Lang Lebah-2 appraisal well was completed at a total depth of 4,320m, with over 600m of proven net gas pay.

MOECO

MOECO Oil, a wholly owned subsidiary of MOECO, participates in Block SK405B with 25.5% participating interest together with PTTEP Sarawak Oil Limited, as the Operator with 59.5% participating interest and PETRONAS with the remaining 15% participating interest. These parties will continue exploration activities in Block SK405B to evaluate quality and quantity of the reserves for possible future development.

In March 2021, Mitsui announced a discovery of oil and natural gas from the first exploration well, Sirung-1 in Block SK405B.

Mubadala Petroleum

Mubadala Petroleum has been present in Malaysia since 2010 and is the operator of offshore Block SK320.

In March 2018, Mubadala Petroleum and partners unveiled plans to invest more than US$1bn to develop the Pegaga offshore gas field in the Central Luconia province. The field is located in Block SK320, operated by Mubadala Petroleum (55%), while Petronas and Shell hold respectively 25% and 20%. In March 2022, Mubadala successfully commenced first gas production from the Pegaga gas field in Block SK 320.

PETRA Energy

In June 2024, PETRA Energy was awarded a 10-year Production Sharing Contract (PSC) for the Banang Late Life Asset. The PSC grants PETRA Energy 100% operatorship and the rights to develop and produce petroleum resources from the Banang field, located 70 km from Kuala Terengganu, offshore Peninsular Malaysia. Petronas, through Malaysia Petroleum Management, the custodian of the nation's hydrocarbon resources, awarded the PSC to PETRA Energy. PETRA Energy is not new to the Banang oilfield. The company began its involvement in 2012 under a Risk Sharing Contract arrangement as a partner with Coastal Energy for the Kapal Banang Meranti cluster. This arrangement transitioned to a Technical Services Agreement in June 2020, with PETRA Energy operating the Banang oilfield on behalf of Petronas. 

Petronas

Petronas holds exclusive ownership rights to all oil and natural gas exploration and production projects in Malaysia, and it is responsible for managing all licensing procedures. The company holds stakes in most of the oil and gas blocks in Malaysia, and it is one of the largest contributors to Malaysian government revenues.

PETRONAS is committed to achieving net zero carbon emissions by 2050 and has established growth targets for cleaner energy solutions including CCS. Substantial progress has already been made, with the Kasawari CCS project currently in construction, several CCS hubs in development, and major international agreements having been announced. 

PTTEP

PTTEP’s portfolio in Malaysia consists of Block SK405B, SK438, SK314A, SK417, PM407, SB412 and SK325 all of which are in the exploration phase. Lang Lebah and Paprika gas fields in Block SK410B are under development phase. Block K, SK309, SK311, Block H and the Malaysia–Thailand Joint Development Area (MTJDA) are in the production phase.

On  December  7,  2023,  PTTEP  Group  announced  that  new  oil  and  natural  gas  discoveries  had  been  made  in  3 fields, offshore Sarawak, including Chenda-1 exploration  well  in  Block  SK405B,  Bangsawan-1  and  Babadon-1 exploration wells in Block SK438, especially Babadon-1  revealing  massive  sweet  gas  sandstone  reservoirs  with  thickness  approximately  200  meters,  considered as sizable field in the offshore Sarawak region which  PTTEP  has  discovered  in  Malaysia,  following  the  earlier achievement at the Lang Lebah Field. Furthermore, PTTEP  had  achieved  a  positive  outcome  with  Sirung-2  appraisal well in Block SK405B, with affirmed petroleum potential  resources.  This  success  followed  the  prior  discovery  of  oil  and  gas  in  Sirung-1  exploration  well  in  2021.  The  project  is  now  moving  towards  the  Pre-Front  End Engineering Design (Pre-FEED).

Roc Oil 

ROC has a 30% participating interest in the D35/D21/J4 PSC, offshore Sarawak.

PETRONAS Carigali Sdn Bhd is the Operator and has appointed ROC as the project development manager, responsible for subsurface management, well engineering, new facilities projects, production optimization and redevelopment project execution.

The terms of the PSC are designed for field redevelopment and enhanced oil recovery to commercially encourage progressive incremental oil and associated gas development over the full life of the PSC for the project.  In addition, the project also offers appraisal opportunities. 

Seascape Energy

Under the Malaysian Bid Round 2022, Seascape was awarded a Production Sharing Contract  for Block 2A offshore Sarawak with material gas resource potential.

Block 2A is located north-west of the prolific Central Luconia hydrocarbon province, outboard of recent gas discoveries. It covers approx. 12,000km² and is located in water depths of between 100-1,400 metres. The Bintulu LNG plant, one of the world’s largest LNG facilities, is located onshore on the coast of Sarawak.

In October 2024, Seascape was awarded a 28% participating interest in a Small Field Asset Production Sharing Contract over the DEWA Complex Cluster off the coast of Sarawak, Malaysia.

Shell

Shell explore for and produce oil and gas offshore Sabah and Sarawak under 17 PSCs, in which their interests range from 20% to 85%.

Offshore Sabah, Shell operate two producing oil fields (Shell interests ranging from 29% to 35%). These include the Gumusut-Kakap deep-water field (Shell interest 29%), where production is via a dedicated floating production system, and the Malikai deep-water field (Shell interest 35%). The company also have a 21% interest in the Siakap North-Petai deep-water field and a 30% interest in the Kebabangan field, both operated by third parties. In March 2018, Shell completed the sale of their 50% interest in the 2011 North Sabah EOR PSC. Additionally, the company have exploration interests in Blocks SB-J, SB-G, SB-N, SB-3G, ND-6 and ND-7 PSCs.

Offshore Sarawak, Shell are the operator of 10 producing gas fields (Shell interests ranging from 37.5% to 50%). The M3S field (Shell interest 70%), F23SW field (Shell interest 50%) and Serai field (Shell interest 37.5%) reached the end of life. F23SW was abandoned successfully in 2018, while the abandonment for M3S will be completed in 2019 and Serai abandonment will be completed between 2019 and 2020. Nearly all the gas produced offshore Sarawak is supplied to Malaysia LNG (the company divested their remaining 15% interest in June 2018) and to their gas-to-liquids plant in Bintulu.

TotalEnergies

TotalEnergies owns interests in two PSCs in exploration phase and signed in June 2023 an agreement with Petronas and Mitsui to develop a carbon storage project in Southeast Asia and evaluate several CO2 storage sites in the Malay Basin.

In January 2024, TotalEnergies signed an agreement with OMV to acquire its 50% interest in Malaysian independent gas producer and operator SapuraOMV for a consideration of $903 million.

SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia. In 2023, SapuraOMV’s operated production (100%) was about 500 Mcf/d of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 7 kb/d of condensates.

Upland Resources

Upland Resources is focused on opportunities in South-East Asia with an initial emphasis on Sarawak.  Over the last 7 years the Company has developed an opportunity on a block in Northern Sarawak, block SK334.

A major study of block SK334 was awarded to Upland in the 2018 Malaysian bid round.  That study is now complete and Upland is in discussion with the regulator to move to Exploration and Production.

KeyFacts Energy: Country Profile