Malaysia – Oil & Gas
Malaysia has a
vibrant oil and gas industry. The national oil company, Petronas is ranked the 69th biggest company in
the world in the Fortune 500 list in 2014, with
a revenue of over US100.7 billion and total assets of over US$169 billion.
Malaysia holds proven oil reserves of 4 billion
barrels as of January 2014, the fourth-highest reserves in Asia-Pacific after China,
India, and Vietnam. Nearly all of
Malaysia's oil comes from offshore fields. The continental shelf is divided
into three producing basins: the basin offshore Eastern Peninsular Malaysia in the west and
the Sarawak and Sabah basins in the
east. Most of the country's oil reserves are located in the Peninsular basin
and tend to be light and sweet crude. Malaysia's benchmark crude oil, Tapis
Blend, is a light and sweet crude oil, with an API gravity of 42.7° and a
sulphur content of 0.04% by weight.
holds 83 trillion cubic feet (Tcf) of proven natural gas reserves as of January
2014, and was the third-largest natural gas reserve holder in the Asia-Pacific
region after China and Indonesia More than half of
the country's natural gas reserves are located in its eastern areas,
predominantly offshore Sarawak. Most of Malaysia's gas reserves are associated
with oil basins, although Sarawak and Sabah have an increasing amount of
non-associated gas reserves that have offset some of the declines from mature
oil and gas basins offshore Peninsular Malaysia.
There are over
3,500 oil and gas (O&G) businesses in Malaysia comprising international oil
companies, independents, services and manufacturig companies that support the
needs of the O&G value chain both domestically and regionally. Many major
global machinery & equipment (M&E) manufacturers have set up bases in
Malaysia to complement home-grown M&E companies, while other Malaysian oil
and gas companies are focused on key strategic segments such as marine,
drilling, engineering, fabrication, offshore installation and operations and
around 30% of the Malaysian government's revenue, although the government has
been actively cutting down on its reliance of petroleum, with a target of 20%.
Petronas is also
the custodian of oil and gas reserves for Malaysia. Hence, all oil and gas
activities are regulated by Petronas. Malaysia encourages foreign oil company
participation through production sharing contracts, in which significant amount
of oil will be given away to the foreign oil company until it reaches a production
milestone. Currently, many major oil companies such as ExxonMobil, Royal Dutch Shell, Nippon Oil, and Murphy Oil are involved in
such contracts. As a result, 40%
of oil fields in Malaysia are developed.
& Gas Infrastructure :-
Malaysia has five oil refineries, providing a
combined capacity of about 578,913 barrels per day (b/d), and a gas-to-liquids
plant with a capacity of 14,700b/d. Three of the refineries are operated by
Petronas (Melaka I and II and Kertih), one by Shell's Malaysian unit and one by
Petron. Petronas' RAPID project paves the way for an expansion of the country's
refining capacity, though this expansion could be offset by Shell's sale or
conversion of its Port Dickson refinery.
Melaka (PSR-1) :- PSR-1 is based in Melaka and is owned by
Petronas' subsidiary Petronas Penapisan (Melaka) Sdn Bhd. It has a refining
capacity of 100,000b/d and processes sweet crude and condensates. It came into
operation in 1994.
Melaka II (PSR-2) :- The Melaka II
refinery, located on the same site as the Melaka I facility, is owned by the
Malaysia Refining Company. It is operated by Petronas Penapisan. Melaka II is
currently Malaysia's largest refinery, which, following expansion works in
2010, raised the plant's capacity by 45,000b/d. It now has a capacity of
170,213b/d. PSR-2 processes medium, high sulphur crude that is mostly sourced
from the Middle East.
Petron Port Dickson :- One of two
refineries in Port Dickson, Negeri Sembilan, the 88,000b/d refinery was
established in 1963. San Miguel's Petron acquired the refinery from ExxonMobil
in August 2011. The refinery processes mainly light and sweet crudes and its
product slate includes gasoline, jet fuel, diesel, liquefied petroleum gas and
low-sulphur residual fuel oil. Unlike other foreign investors in Malaysia's
refining segment who are winding down their interests, Petron is looking to
upgrade its Port Dickson facility and network expansion at a cost of about
Shell Port Dickson :- Shell's Port
Dickson refinery is the bigger of the two in the area with a licensed
production capacity of 156,000b/d. Most of its output is consumed within
Malaysia. It was also established in 1963. Its product slate includes gasoline,
jet fuel, diesel, sulphur, liquefied petroleum gas and propylene.
Kertih :- Kertih is operated by Petronas Penapisan
and is based in the northern state of Terengganu. It has a refining capacity of
about 49,000b/d and mainly uses local light, sweet crude for feedstock. The
refinery is part of a wider integrated petrochemical complex in the Petronas
Petroleum Industry Complex.
(GTL) :- Shell's
Bintulu GTL plant - also known as Shell Middle Distillate Synthesis (SMDS)
plant - is its first in the world. Based in Bintulu, Sarawak, the plant is
located near gas fields and converts gas into synthetic petroleum products. The
GTL plant opened in 1993 when and is capable of converting 3.92mn cubic metres
per day of gas into 14,700b/d of transport fuels and products such as naphtha,
kerosene, detergent feedstock and waxes. Bintulu GTL is a JV between Shell,
Mitsubishi, Petronas and the state government of Sarawak. In 2011, a company
representative revealed that the plant was to expand its output to 29,400b/d -
a doubling of its original capacity of 14,700b/d.