By ZARINA ZAKARIAH
KUALA LUMPUR: National oil company Petroliam Nasional Bhd (Petronas), has projected that there would be about 20 greenfield and 30 brownfield projects between 2018 to 2020 that has the potential for future oil projects.
Out of this, 30 per cent of the greenfield projects will have 100 per cent new facilities development while 75 per cent of the brownfield projects has about 10 per cent for new facilities development.
The oil company, in its Petronas Activity Outlook 2018-2020 report, said there are about 100 awarded contract areas operated by 26 petroleum arrangement contractors or PAC operators, with biggest PAC operator, Petronas Carigali Sdn Bhd, operating 60 per cent of total Malaysian assets.
Disclosing its activity outlook for the next three years in the report, Petronas will also continue to promote and enhance transparency within the oil and gas industry players, a move to ensure industry players are equipped with more information that can assist them with better resources as well as budget planning.
President and chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said in responding to 'Lower for Longer' oil price environment, that it is crucial to turn crisis into opportunities.
"Amidst uncertainty and inherent pressure of project feasibility, initiatives like cost compression and industry collaborations are currently on top of the agenda.
"This drives rallying call for everyone in the ecosystem to build a robust, globally competitive Malaysian Oil and Gas Services and Equipment (OGSE) industry that will sustain the market turbulence and emerge stronger," he said in the report.
Zulkiflee said a resilient industry will promote a healthy industry ecosystem and safeguard strategic national interests through the pursuit of enhancing industry’s competitiveness, resilience, leadership and meaningful participation of its players.
With an average production of 1.7 million barrels a day forecasted over the next five years, Malaysia has a robust pipeline of potential projects focused on developing greenfield projects while maximising ultimate recovery of brownfield projects.
Petronas had also outlined three critical factors for the oil prices to gain strength - compliance by Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries, the agility of US oil producers and sustaining healthy level of oil demand growth.
In order for oil prices to continue improving, OPEC and non-OPEC need to demonstrate commitment to the production output cut level pledged in November 2016 of 1.8 million barrels per day.
Saudi Arabia is the largest contributor to the output cut in OPEC with 0.5 million barrels per day.
For non-OPEC, Russia has pledged the largest cut of 0.3 million barrels per day. Malaysia has also committed to reduce its oil production by 20 thousand barrels per day.
OPEC top five 5 producers are Saudi Arabia (30.5 per cent), Iraq (13.7 per cent), Iran (11.7 per cent), UAE (8.8 per cent) and Kuwait (8.2 per cent).
US oil producers have been agile to capture the opportunities from higher crude oil prices. US crude oil production is expected to increase from 9.2 million barrels per day in 2017 to 9.9 million barrels per day in 2018, 0.7 million barrels per day or 8 per cent increment, the report outlined.
Sustained healthy global demand growth will also facilitate oil stock drawn down and subsequently, hasten global oil market rebalancing.
Currently, global oil demand is recorded at 98 million barrels per day and is expected to grow by 1.4 million barrels per day in 2018.
57 per cent of the demand growth contributed by Asia Pacific region mainly from China and India.