PETROLIAM Nasional Bhd (Petronas) is reviewing its future capital expenditure (capex) in light of the declining oil price, said its executive vice-president and chief executive officer of upstream Datuk Wee Yiaw Hin.
The future capex could potentially be streamlined, he said at a media briefing on the upcoming eight International Petroleum Technology Conference (IPTC).
“Exploration and production (E&P) business is a long-term business, so volatility in oil price is something we need to manage.
“If the oil prices remain low for over two years, than we will have to look at optimising the cost,” Wee said.
“Capex will not be changed as we will not be looking into cutting our programmes, but because we want to be sharper and more efficient in our cost management. Therefore, we are reviewing it in light of the (declining) global oil prices.”
Wee shared his hopes that the upcoming IPTC, themed “Innovation and Collaboration: Keys to Affordable Energy”, would be the ideal platform to discuss new, innovative and cost-effective ways to increase the production of oil through enhanced oil recovery (EOR).
“Malaysia, through Petronas, is at the forefront of the development of EOR. In fact, we are probably the third biggest in the world when it comes to EOR,” he said.
“We can increase the recovery factor from 35 per cent to 45-50 per cent, which equals to 500-800 million barrels per day (bpd). This is an increase of 90,000 to 100,000 bpd from what it is currently.”
Petronas had in September allocated some RM1.1 billion for EOR research and development (R&D) over the next three to four year as 10 of its existing producing oilfields have EOR potential.
The application of EOR technology at the Tapis oilfield offshore Terengganu, in particular, was expected to boost oil production by up to 35,000 bpd from 3,000 to 4,000 bpd, and was also projected to increase the economic value of the field as well as extend its life by more than 25 years.
“The biggest challenge we face when it comes to EOR is the cost
to bring out the oil, in creating
the platform as well as the offshore drilling. The more cost-effective the integrated value change,
the better it is for Petronas,” said Wee.
Petronas is already collaborating with Shell Group, Schlumberger Ltd, Halliburton and Deleum Group, among others, for its EOR segment.
The three-day conference will be held on at the Kuala Lumpur Convention Centre on December 10-12 and is expected to attract 8,000 delegates.