* Oil output to rise above 600,000 bpd as Gumusut-Kakap
* Gas production headed for fresh high before 2020 -Wood
* Malaysia ranked 4th in added oil, gas reserves in 2012
By Florence Tan
KUALA LUMPUR, June 14 Malaysia's $30 billion
push to find more oil and gas is paying off, with domestic crude
output bouncing off a recent 20-year low and natural gas
production on track to hit a record high before the end of the
Southeast Asia's second-biggest oil producer expects its
crude and condensate output to rise to more than 600,000 barrels
per day (bpd) in the next five years as new big fields start up
and natural decline is stemmed at mature fields.
Malaysia's oil output is not likely to rise much higher than
that as most recent finds have been gas, although production of
liquids may briefly approach former levels near 700,000 bpd when
some of the new fields hit their peaks.
"It'll go above 600,000 bpd of total liquid production from
Malaysia and then it will plateau," Wee Yiaw Hin, the head of
exploration and production for state oil and gas company
Petronas, told Reuters.
Recent discoveries offshore Sarawak and Sabah, however,
could push the country's gas output to a record high by 2020,
ensuring Malaysia will remain one of Asia's largest suppliers of
the liquefied form of the fuel, and easing worries that falling
reserves and rising domestic demand could curb LNG exports.
Gas makes up about 60 percent of Malaysia's total oil and
gas output, and the shift in production will be increasingly
important not only for Petronas, but also to the government,
which gets nearly half its budget from the state oil company.
Malaysia's natural gas output is expected to rise to a
record 7 billion cubic feet per day in 2018, up from about 6
billion now, according to energy consultancy Wood Mackenzie.
Petronas, which owns and manages Malaysia's oil and gas
resources, previously forecast 2013 pre-tax profit of 89 billion
ringgit ($29 billion), flat on last year, with lower oil prices
offsetting a 2 percent rise in total production.
AGGRESSIVE PLAY PAYS OFF IN GAS
Petronas and partners made 24 discoveries last year,
including two overseas, adding 2 billion barrels of oil
equivalent to the country's reserves, Wee said.
According to Wood Mackenzie, Malaysia ranked fourth globally
in terms of reserves added in 2012.
"We very seldom see a Southeast Asian country in the top 10
and that success is in Sarawak in gas," said Craig McMahon, lead
Southeast Asia analyst at Wood Mackenzie.
One of Malaysia's biggest gas finds is in Block SK310
offshore Sarawak, where Newfield Exploration estimates
initial gas in place at 1.5 trillion to 3 trillion cubic feet.
Petronas spent around 93 billion ringgit ($30 billion) over
2008-2011 to reverse falling output, mostly at home. Its success
is in sharp contrast to neighbour Indonesia.
Indonesia, Southeast Asia's largest oil and gas producer,
has seen its liquids output drop to around 830,000 bpd, about
half 1990s levels; while its gas output has dropped to 8.2
billion cubic feet a day, down 12 percent from 2010.
Indonesia has also been pushing to reverse its declining
output, setting ambitious targets, but has struggled to attract
new international oil and gas investors.
"Petronas is very much the regional poster child when it
comes to NOCs (national oil companies)," McMahon said.
Malaysia's revised exploration and development tax treatment
attracted ExxonMobil and Royal Dutch Shell,
deepwater specialists like Murphy Oil Corp and smaller
firms such as Newfield Exploration Co, McMahon said.
This year, Petronas and its contractors have already made
three new discoveries in the first quarter and more are
expected, Wee said. "Our exploration programme in Malaysia
continues to be very aggressive," he said.
Malaysia was the second-largest LNG exporter in 2012,
according to BP's review of world energy, shipping 24 million
tonnes from its liquefying plant in Bintulu in Sarawak, mostly
to Japan, South Korea and Taiwan.
Petronas plans to make a final investment decision later
this year to build a second floating LNG (FLNG) terminal
offshore Sabah, while its first FLNG project is still underway.
With a ninth train to be added at Bintulu, a total 6.3
million tonnes per year of new LNG capacity will be onstream in
With gas output set to rise, Petronas could also renew some
expiring term contracts for LNG, McMahon said.
Much of Malaysia's added oil output will come from the
Shell-operated Gumusut-Kakap and Malikai fields offshore Sabah.
Gumusut-Kakap alone will add up to 120,000 bpd when the
Sabah Oil and Gas Terminal in Kimanis is completed next year,
Petronas' Wee said.
"In the next three to five years, we will be able to sustain
or even grow our production from these new projects," Wee said.
Malaysia's liquids output in 2012 was at 586,000 bpd,
according to Petronas. It fell to its lowest in 20 years at
569,000 bpd in 2011. ()