Energy (Oil & Gas)

 Other Link : Gas Supply Act

 Petroleum and Gas Products

Output of the petroleum refineries fell by 11.1% during the first seven months of 1998 against a growth of 10.2% over the same period of 1997. The decline in production was partly attributable to the general contraction in domestic demand for fuel from the transportation, construction, industrial and commercial as well as household sectors following the slowdown in economic activities. In part, it was also due to slackening external demand from the crisis affected East Asian region. Consequently, its contribution to the overall manufacturing output declined slightly to 1.3% during the period under review (January-July 1997: 1.4%).

Production of major petroleum products such as kerosene, fuel oil, diesel and gasoline decreased markedly, between 6.2% and 19.6% during the first seven months of 1998, due to the lower level of crude petroleum available for domestic refining. Output of liquefied petroleum gas, however, increased marginally by 4.3% during the same period. The increase in output was partly to replace depleting stocks.

As for the gas industry, the net production of natural gas declines by an estimated 1.0% to 3,860 million standard cubic feet per day (mmscfd) in 1998 over the 3,900 mmscfd produced in 1997. The decrease is on account of lower demand from South Korea, inspite of the anticipated increase in demand from the Penninsular Gas Utilization Programme. In Penninsular Malaysia, gas from the Duyong fields is processed in the four gas processing plants in Kertih, with total processing capacity at about 1,000 mmscfd. With the completion of two more gas-processing plants in 1999 the capacity is envisaged to increase to 2,750 mmscfd. Tenega National Berhad and the Independent Power Produces use a major portion (72%) of the processed gas for power generation while another 16% is used as feedstock in the petrochemical industries and the balance exported to Singapore. The gas mined offshore Sabah and Sarawak is liquefied at the two plants in Bintulu and mostly exported to Japan and South Korea. Output of liquefied natural gas is anticipated to decrease marginally by 0.6% to 15,210 tonnes in 1998 due mainly to lower demand from South Korea.

Crude Petroleum and Gas

In the first six months of 1998, crude oil production increased by 1.5% to 729,783 barrels per day (bpd) as compared to 719,000 bpd during the same period in 1997. For the whole of 1998, production of crude oil is estimated to increase production of crude oil is estimate to increase by 0.6% to 718,300 bpd from 714,300 bpd recorded in 1997. The increase is in accordance with PETRONAS planned production schedule. Of the total output in 1998, Peninsular Malaysia contributes an estimated 58.5% or 420,400 bpd from 16 oil fields, while Sarawak contributes 205,500 bd or 28.6% from 13 oil fields and Sabah contributes an output of 92,400 bpd or 12.9% of the national output 

from 8 oil fields. With regard to the number of exploration oil fields, 12 have been drilled in 1997 and seven in 1998 as at June 1998. For the development and production fields, 21 oil fields have been drilled in 1997 and 25 oil fields drilled in 1998 as at June 1998. A total of 32,851 kilometers of seismic data has been acquired for exploration and development by PETRONAS CARIGALI to further expand the production of oil and gas in Malaysia. As at June 1998, two Product Sharing Contracts (PSCs) have been signed while nine PSCs were signed in 1997.

In the first six months of 1998, the output of natural gas declined by 0.3% to 706,901 million standard cubic feet (mmscf) from 708,679 mmscf during the corresponding period of 1997. For the year as a whole, an output decline of 1% to 1,408,240 mmscf (1197: 1,42,466 msmscf) is estimated, mainly due to the sluggish external demand of liquefied natural gas (LNG) from South Korea. On the other hand, domestic consumption of natural gas increases by an estimated 2.8% following the completion of Peninsular Gas Utilisation project III (PGU III) in December 1997, which covers 450 kilometers from Meru in Selangor to Pauh in Perlis. The sectors that consume natural gas extensively are the power sector which consumes 846 mmscfd or 72.4% of total domestic consumption, followed by the industrial sector at 185.8 mmscfd or 15.9%, while the rest is for export. Based on the present rate of extraction natural gas reserves can last for another 40 years.

Production of Crude Oil and Gas