KUALA LUMPUR: Malaysia’s upstream oil and gas (O&G) sector is expected to sustain a strong supply, with exploration and production (E&P) and development activities staying robust in 2025, according to MIDF Amanah Investment Bank Bhd (MIDF Amanah IB).
In a research note, the investment bank said the upstream will also maintain its efforts in reducing carbon emissions via advanced technology and strategic partnerships.
It said Petroliam Nasional Bhd (Petronas) will focus on accelerating exploration in new and mature areas while fast-tracking appraisal programmes to replenish resources and sustain production.
“The upstream division is expected to expand its resources to meet these production targets while managing cost effectively with lowered emissions. “Sixty-nine development wells are expected to commence by 2025, signalling the start of the development phase and an eventual slowdown in E&P,” it said.
The division would continue its venture in carbon capture and storage (CCS) as part of its energy transition and decarbonisation agenda, ultimately positioning Malaysia as a regional hub for CCS solutions, it added.
MIDF Amanah IB stated that over the next three years, more than 400 wells are anticipated to be drilled, 39 upstream projects executed, 153 wells abandoned, and 38 facilities decommissioned.
Additionally, it said the O&G services and equipment (OGSE) sector would play a crucial role in ensuring sustained competitiveness and project deliveries while encouraging collaboration with other stakeholders in the upstream division.
“We maintain our optimism on the sector, despite the possibility of volatile crude oil prices given the external geopolitical influences and the expected increased productions in North America and the Middle East.
“We believe that Malaysia’s OGSE companies would continue to benefit from Petronas’s priorities in the upstream and decarbonisation solutions, with a high emphasis on E&P, development and CCS,” it said.
Meanwhile, CIMB Securities Sdn Bhd echoed MIDF Amanah IB’s view, maintaining its “overweight” stance on the O&G sector while anticipating a strong earnings momentum in 2025, fueled by robust domestic upstream activity.
“The tight market supply also presents opportunities for new floating production storage and offloading and offshore supply vessel builds in 2025,” it said in a separate note. – Bernama
