KUALA LUMPUR, March 25 — The capital expenditure in Malaysia's oil and gas sector's upstream business is forecast to near US$60 billion (about RM198 billion) over the next five years, Prime Minister Datuk Seri Najib Tun Razak said today.
He said the amount contributed significantly to the total upstream spending in South East Asia, which was expected to receive one-fifth of the global upstream spending in the next decade.
“While global upstream spending in the oil and gas sector is expected to remain set at around US$700 billion (about RM2.31 trillion) over the next decade, close to 20 per cent of this spending will be here in South East Asia,” said Najib, who is also the Finance Minister, at the opening of the inaugural Offshore Technology Conference Asia 2014.
Najib said leveraging on the sector's tremendous growth in the region, Malaysia was keen on attracting more international players to make strategic investments in the country and to complement homegrown companies.
Also present were International Trade and Industry Minister Datuk Seri Mustapa Mohamed, Foreign Minister Datuk Seri Anifah Aman and Petronas President and Chief Executive Officer Tan Sri Shamsul Azhar Abbas.
Najib said conference participants should look at Malaysia from a wider regional perspective and consider the country as a strategic business partner within the framework of Asean.
He said Malaysia has the perfect mix of ingredients for a regional energy hub and an active and robust domestic oil and gas industry, supported by significant resources, progressive and supportive policies set by the government and proven technical ability.
The prime minister also said Malaysia has a strong regulatory and legislative framework to safeguard the interests of commercial investors and the country was well-positioned to be the regional hub for oil and gas machinery and equipment, fabrication and services.
“With our domestic capabilities, we believe Malaysia is an ideal base for businesses to expand their oil and gas operations,” he said.
Najib said Malaysia's dynamic oil and gas industry has been facilitated by the close cooperation and support of the government through progressive policies such as the Economic Transformation Programme (ETP), well-designed incentives and active two-way communication.
Najib said the ETP has developed targets in oil, gas and energy in order to galvanise Malaysia's upstream sector, expanding the country's domestic downstream sector and venture into alternative energy sources.
The ETP projects include rejuvenating existing fields through enhanced oil recovery, developing marginal fields and intensifying exploration activities.
“These projects provide huge opportunities for upstream players to participate in, with the strong support and backing of the government,” he said.
Najib said that as a result of the government's effort and innovation from the engineers in developing new extraction methods and identifying new fields, domestic production grew by 2.1 per cent last year, as compared to 1.8 per cent growth in 2012, and was expected to continue growing this year.
Earlier, Shamsul Abbas, in his speech, said Petronas' aggressive exploration and production strategies in the past four years have borne fruition.
Among the initiatives undertaken were testing of new play types in deepwater and complex fields, introduction of enhanced oil recovery and awarding of more risk service contracts to develop marginal fields.
To date, Petronas, which boasts more than 200 companies and has presence in 60 countries, has an annual production of 2.1 million barrels globally.
With revenues at around US$100 billion (about RM330 billion), making it the largest company in the world and the most profitable in Asia.
Themed “Meeting the Challenges of Asia”, the four-day conference is being attended by some 15,000 delegates and trade visitors from 72 countries.
Created under the same successful brand as the flagship OTC Houston, artic Technology Conference and OTC Brazil, the conference showcases state-of-the-art technology for offshore drilling, exploration, production and environmental protection. — Bernama