PETRONAS MPM aims to unlock five new frontier basins in the country.

MALAYSIA’S oil and gas (O&G) sector is asserting enduring signi­ficance and robust growth potential driven by the inherent dynamics of resource abundance, technological innovation and persistent global demand.

This critical industry, a bedrock of the economy, continues to unlock new opportunities and sustain vital energy supplies.

While Malaysia embraces a responsible energy transition, the fundamental value and strategic importance of its hydrocarbon wealth remain undeniable, with the sector’s trajectory defined by its foundational role in meeting both national and global energy needs.

Malaysian Petroleum Management (MPM) senior vice-president Datuk Bacho Pilong stated that the upcoming decades are set for continued growth, evidenced by the heightened upstream momentum last year, which coincided with Petroliam Nasional Berhad’s (PETRONAS) 50-year anniversary.

Over the past half-century, Malaysia’s oil production has experienced a twenty-fold increase, from over 100,000 barrels per day in the 1970s to over two million barrels per day in 2024.

Last year, PETRONAS also secured RM50bil in upstream investments and signed a record 14 product sharing contracts (PSCs) with 12 operators.

“From our humble beginnings in 1974, PETRONAS and MPM have grown leaps and bounds,” said Bacho.

“Last year, we awarded the highest number of blocks (14) the country has ever done.

“Our role is about creating a future for the industry, to ensure its prominence for the decades to come. I believe that PETRONAS’ future could be even more exciting than the past fifty years,” said Bacho. — IZZRAFIQ ALIAS/The Star

“This is thanks to the mature infrastructure network, progressive fiscal terms, enhanced transparency and a skilled talent pool, crucial for the industry to flou­rish.

“This stability provides investors with the certainty to come in and invest in the country.”

Bacho added that MPM’s role goes beyond being a mere regulatory arm, as the organisation aims to actively shape the future of the industry, accelerating growth and global competitiveness.

“Our role is about creating a future for the industry, to ensure its prominence for the decades to come. I believe that PETRONAS’ future could be even more exciting than the past fifty years,” he said.

These strategic undertakings represent a pivotal phase in PETRONAS’ bold transformation journey as an integrated energy company, one that goes beyond maintaining its traditional upstream excellence by 2035.

“We are reimagining Malaysia’s role as a regional energy leader through innovative partnerships, cutting-edge technology and asset excellence,” said Bacho.

“This transformation encompasses our evolution as a progressive energy and solutions partner, where every business decision – from frontier basin exploration to portfolio enhancement – serves the larger vision of delivering sustainable, competitive energy for the next decade and beyond.

“This comprehensive shift is what we call PETRONAS 2.0 – building tomorrow’s energy ecosystem today, ensuring Malaysia remains not just relevant but essential in the global energy transition,” he added.

Untapped resources

Bacho shared that to invigorate the sector, PETRONAS, through MPM, plans to reactivate dormant oil basins in the country via strategic partnerships, untapping unutilised reserves.

He explained that, in total, Malaysia is home to eight basins. These comprise the Malay Basin, Penyu Basin, Langkasuka Basin in Peninsular Malaysia, Sarawak Basin, Layang-Layang Basin, Kinabalu Basin, Tawau Basin and Sandakan Basin in East Malaysia.

“Just imagine, all this time, our playing field was limited to three basins. But, in the decades to come, it will be expanded to eight basins. There are five dormant basins just waiting to be activa­ted,” he said.

“So, we must attract more investments to capitalise on these opportunities, to unlock this growth potential.”

Each of these basins offers distinct geological potential and commercial advantages, backed by enhanced subsurface data, improved fiscal terms and viable infrastructure networks.

This year, the production sharing contracts for the Mutiara cluster in the Sandakan Basin and the Temaris Cluster in the Malay Basin were successfully launched and awarded to Dialog Resources Sdn Bhd and Seascape Energy Asia (One) Sdn Bhd respectively.

Additionally, strategic technical evaluation agreements (TEAs) were signed with major industry players such as BP, TotalEnergies (France) and Eni (Italy), for the Langkasuka and Layang-Layang basins.

Bacho described Sabah as a potential investment opportunity, as there are many blocks available in the state’s untapped basins.

Recently, Japanese company Inpex Corporation made a comeback into the country, with plans mooted for the Tawau Basin.

In the 1960s, the company began expanding abroad, including exploration in Sabah under Sabah Teiseki Oil Co (a subsidiary of Teikoku Oil), and drilled five oil wells at the southeastern tip of Sebatik Island, off the coast of Tawau.

Catalysing investments

To activate and streamline the operations of these basins, MPM is forming strategic collaborations and partnerships with potential investors.

This is done through Malaysia Bid Round (MBR), an annual exercise to develop upstream initiatives and offer investors different opportunities to grow their energy portfolios.

MBR 2025 is offering a balanced portfolio with five exploration blocks and three discovered resource opportunities (DRO) clusters in Malaysia.

“Malaysia remains an attractive and vibrant exploration and production (E&P) investment destination for potential investors,” said Bacho.

He added that a game-changer in attracting investment interest has been the PETRONAS myPROdata platform.

Bacho said this system provides greater access and transparency to Malaysia’s E&P data, encapsulating over 100 petabytes of accumulated seismic, production and field data over the past five decades.

Access to these datasets eases the decision-making process for investors, enabling them to make well-informed decisions on their investments.

“This can be a catalyst for the industry. By sharing this data with investors, at a nominal subscription fee, we speed up their decision-making and de-risk exploration for them,” said Bacho.

He disclosed that MPM will be spending roughly RM500mil annually for five years to acquire valuable seismic data.

This initiative, he says, bolsters investor confidence.

Coupled with the re-entry of major players into the country and the continued high demand for O&G from the Global South, it highlights the potential for an upward trajectory in the industry.

“It’s about confidence in many aspects: our geology, our regulatory systems, our stable market prices. The moment investors have this confidence, it paves the way for more investments,” Bacho affirmed.

MPM also recently introduced Malaysia Bid Round Plus (MBR+), an initiative that allows players to bid on relinquished blocks without waiting for the next annual bid round.

This flexibility, exclusively available for PETRONAS myPROdata subscribers, ensures continuous opportunities for new operators and investors. To date, MPM has launched two MBR+ licensing rounds with 100% take-up rates.

In addition to the PETRONAS myPROdata platform, MPM employs the Right Asset, Right Player (RARP) strategy.

This strategy involves the clustering of assets, classified as late-life assets, small-field assets and so on, depending on their maturity. This effectively matches E&P players with assets that align with their niche capabilities, maximising value creation for all parties.

“Different operators have different focuses, priorities and approaches. With RARP and MBR+, we can utilise the assets to the fullest, and extract more value from them, so it’s a win-win for everybody,” Bacho explained.

Responsible energy management

In line with the National Energy Transition Roadmap (NETR), to achieve net-zero carbon emissions by 2050, Bacho emphasised that while the industry continues to drive economic growth and ensure energy security,

embedding emission management from the outset is no longer an option, but a fundamental aspect of operations.

A proactive stance is critical, as failure to address emissions could lead to challenges, particularly in securing crucial financing for projects.

“The difference between back then and now is that, in production, emissions are now managed upfront. It is part of the plan as built-in mechanisms and no longer an afterthought,” said Bacho.

“We must ask ourselves,

‘Can we manage the emissions?’, ‘Can we capture the released gas?’. It’s about a change in thinking for us all.”