Exclusive ownership among big competitors
Malaysia’s oil and gas resources are exclusively owned by Petronas, and since the company’s establishment in 1974, it was also the sole regulator of all upstream activities in the country. Despite a decrease in revenue for two years in a row during the COVID-19 pandemic, Petronas managed to bounce back and recorded around a 51 percent increase in revenue in 2022. In November 2023, Petronas announced 19 new exploration discoveries which will contribute over one billion barrels of oil equivalent (bboe) of new resources in Malaysia.Nevertheless, it was not the only industry player in the country despite having exclusive ownership over the resources. Big competitors like Shell and Chevron also had a large percentage of the petroleum market share in the country. But the state-owned company has planned to expand its gas and LNG sector further since last year. Petronas ranked fifth globally as an LNG exporting company, after QatarEnergy, Cheniere Energy, Shell, and Sonatrach.
Geopolitical factors and inflation challenge
Although in 2023 the Brent crude oil price saw a decrease compared to the previous year, Malaysia's oil sector still experienced a profitable year. Moreover, demand for natural gas has been increasing since 2022 due to Europe’s phasing out of Russian energy resources after Russia’s invasion of Ukraine, and Malaysia’s gas industry could benefit from the geopolitical situation.But the impact of global inflation has caused slower economic activities, and the oil and gas industry in Malaysia could suffer from the impact as people were trying to consume less. More environmentally conscious consumers could also pose a challenge as people try to steer clear of fossil fuels. Nonetheless, fossil fuels are still the main sources of energy in Malaysia.
