Upstream Oil and Gas Companies in Malaysia

The upstream oil and gas sector in Malaysia involves the exploration, drilling, and production of crude oil and natural gas before they are processed or refined. This sector includes both onshore and offshore operations and is driven by national and international companies. Key players include Petronas, Shell, Hess Corporation, and Sapura Energy, which conduct seismic surveys, well drilling, reservoir management, and production operations.

Malaysia holds approximately 3.6 billion barrels of proven oil reserves and 43.8 trillion cubic feet of natural gas reserves, making it a major hydrocarbon producer in Southeast Asia. The oil and gas sector contributes significantly to national revenue, though its direct contribution to GDP has declined in recent years and now fluctuates around 15–20% depending on global prices. Petronas remains the dominant force, managing nearly all upstream activities through its subsidiaries.

How Does Exploration Work in Malaysia’s Upstream Sector?

Exploration involves locating subsurface hydrocarbon deposits onshore or offshore. Petronas Carigali, Shell Malaysia, and other firms conduct geological and geophysical surveys, using advanced technologies such as 2D and 3D seismic imaging, gravity data, and satellite imagery to map underground formations. Exploratory drilling is conducted once a viable prospect is identified.

One of the success is the discovery of the Kasawari gas field in Sarawak, estimated to contain over 3 trillion cubic feet of recoverable gas. Exploration rights and compliance are regulated by Malaysia Petroleum Management (MPM), a unit under Petronas, which oversees technical, environmental, and commercial governance of petroleum resources.

What Are the Major Production Activities in Malaysia?

Production activities include extracting oil and gas from reservoirs and transporting them to processing facilities. Malaysia’s key production areas are offshore in Sabah and Sarawak, including fields like Gumusut-Kakap (operated by Shell and Petronas) and Kinabalu (operated by Hibiscus Petroleum and Petronas). Combined, these operations produce hundreds of thousands of barrels of oil equivalent per day.

Enhanced Oil Recovery (EOR) methods such as CO₂ injection, water flooding, and chemical EOR are used to extend the life of mature fields. The Baram Delta EOR project, a collaboration between Petronas and Shell, significantly increased recovery rates. Offshore production is supported by Floating Production Storage and Offloading (FPSO) vessels such as FPSO Kikeh, operated by MISC Berhad.

Who Are the Leading Upstream Companies in Malaysia?

Petronas is the leading upstream operator, primarily through Petronas Carigali. International oil companies (IOCs) such as Shell, ExxonMobil, Hess, and Mubadala operate under Production Sharing Contracts (PSCs) with Petronas.

Sapura Energy is a major local services provider, offering drilling, subsea engineering, and installation services. Bumi Armada and Yinson Holdings operate FPSOs for offshore production, particularly in deepwater fields. Other service and technical providers include Schlumberger, Halliburton, and Baker Hughes.

Is The Upstream Sector Regulated Through Petroleum Development Act 1974?

Yes, the upstream sector is regulated through the Petroleum Development Act 1974, which grants Petronas exclusive rights over Malaysia’s petroleum resources. Malaysia Petroleum Management (MPM), under Petronas, manages licensing, exploration approvals, and contract awards.

Environmental oversight is handled by the Department of Environment (DOE), which enforces Environmental Impact Assessments (EIA) for offshore drilling and development. PSCs govern the financial relationship between Petronas and upstream contractors, specifying cost recovery mechanisms and profit-sharing structures.

How Does Technology Impact Malaysia’s Upstream Sector?

Deepwater drilling rigs, automated platforms, and real-time data monitoring systems are used to enhance offshore operations. Sapura Energy’s semi-submersible rigs enable complex deepwater projects in the South China Sea.

AI and digital twin technologies are increasingly used by Petronas to predict equipment failures and optimize asset performance. The Kasawari Carbon Capture and Storage (CCS) project, operated by Petronas, is one of the largest offshore CCS initiatives in Asia and reflects Malaysia’s commitment to reducing the carbon footprint of its oil and gas operations.

What Are the Employment Opportunities in This Sector?

The upstream oil and gas industry in Malaysia employs over 50,000 professionals, including engineers, geoscientists, rig operators, and logistics coordinators. The sector offers competitive salaries, international exposure, and career growth, especially in offshore roles and engineering disciplines.

Majikan.my, a Malaysian job and career platform, connects job seekers with employment opportunities in the energy sector. It features job listings from upstream employers such as Petronas, Shell, Sapura Energy, and Yinson, covering roles from drilling engineers to health and safety officers. For career development, Majikan.my also provides salary benchmarking, industry news, and access to upskilling courses. Visit Majikan.my to explore career paths in Malaysia’s upstream oil and gas sector.