KUALA LUMPUR (Dec 22): Petroliam Nasional Bhd's (Petronas) decision to cut its oil production will not have significant impact on the Malaysian government revenue, Second Finance Minister Datuk Johari Abdul Ghani said today.

The 20,000 barrels per day (bpd) cut constitutes less than 5% of its overall oil production, and the volume cut will be compensated by a better oil price, he said.

Petronas' 2016 production was estimated at 648,000 bpd, according to an economic report issued by the Malaysian government in October.

"By reducing oil production, OPEC countries will more or less impart control upon global oil price. However, the increase in oil price will not be drastic as OPEC countries constitute only a third of global oil producers," he added.

The decision by Petronas will be implemented from January 2017 onwards as Malaysia entered into a joint agreement between OPEC countries and 11 other non-OPEC countries on Dec 10 to reduce global oil supply.

Petronas said in a statement yesterday, "This voluntary adjustment, taking into consideration prevailing market conditions and prospects, is expected to involve up to 20,000 bpd of crude oil from the country's 2016 average production."