Since its founding in 1974, Petroliam Nasional Bhd (PETRONAS), through its key division Malaysia Petroleum Management (MPM), has been instrumental in developing Malaysia’s upstream sector.

MPM oversees the entire lifecycle of the nation’s upstream oil and gas (O&G) assets, ensuring sustainable development, creating value and fostering a competitive investment climate.

Over the past 50 years, the upstream sector has attracted a cumulative RM700 billion in investments, securing Malaysia’s position as a competitive energy hub.

In an interview with The Edge, MPM Senior Vice-President Datuk Ir. Bacho Pilong disclosed that annual investments over the past decade had ranged from RM40 billion to RM50 billion. This year’s projection is set to reach a record high of over RM60 billion, with a target of achieving production of two million barrels of oil equivalent per day by 2025.

MPM’s forward-looking approach leverages advanced technologies and innovative methods to ensure efficient and sustainable operations.

One of MPM’s key strategies for expanding Malaysia’s resource base is its innovative “clustered exploration” approach, tailored for mature geological regions. This technique has uncovered untapped potential in previously explored areas, overcoming the complexities of resource extraction.

By deploying advanced seismic surveys and data-driven analyses, MPM not only identifies and assesses hydrocarbon potential but also ensures Malaysia remains an attractive investment destination for both local and international investors.

In addition, Bacho notes that MPM’s strategies align with the global shift towards sustainability, with a focus on monetising resources responsibly while addressing the need for emissions reduction.

“How do we monetise these resources responsibly while moving towards a lower-carbon future? Our goal is to supply energy sustainably. The world needs more energy but with lower emissions. While we continue producing hydrocarbon resources, emissions must be abated. That’s our priority as we transition towards a greener future,” Bacho says, reinforcing PETRONAS’ commitment to managing emissions in line with its net-zero carbon aspirations.

However, challenges persist. According to Bacho, while about 40 billion barrels of oil equivalent have been discovered in Malaysia, around 21 billion barrels remain classified as “yet-to-find” resources. These untapped resources are predominantly located in deepwater areas, requiring higher development costs, advanced technology and sophisticated operations for extraction.

Recognising these challenges, PETRONAS has taken proactive steps to sustain investment and production in Malaysia’s upstream sector. One such effort is the Malaysia Bid Round (MBR), an initiative aimed at attracting investors and leveraging cutting-edge technologies to unlock challenging and hard-to-reach resources, ensuring the industry’s long-term growth and sustainability.

The MBR has seen significant success, drawing interest from new international players such as South Korea-based SK earthon, POSCO International Corp, Jadestone Energy, Ping Petroleum, Seascape Energy (previously known as Longboat Energy), PERTAMINA, EnQuest and Japan-based Inpex Corp. It has also attracted local companies such as Dialog, EPOMS, Petra Energy and Duta Marine, which are expanding their presence in the upstream sector.

The strategic launch and management of the MBR initiative revitalised upstream activities in Malaysia. Rebranded in 2021 during the pandemic, MBR was launched virtually with a series of webinars. In 2022, an exclusive physical launch drew global investor attention, marking a shift from previous practices. MBR now represents a unified promotional effort for exploration blocks, discovered resource opportunities (DRO) and mature assets. This initiative has affirmed PETRONAS’ commitment to regulatory certainty, maintaining petroleum production during the energy transition and bolstering investors’ confidence.

MPM continuously refines the MBR process based on feedback from investors, ensuring an efficient and investor-friendly experience. Key enhancements include extending the data room period to provide potential bidders with more time for thorough evaluations and accelerating block awards to foster a positive experience. In addition, a comprehensive bid guideline and the introduction of an MBR online portal have simplified decision-making and bid submission, making the process more transparent and accessible.

To further attract investors, MBR offers competitive fiscal terms tailored to varying resource profiles, such as the Enhanced Profitability Terms (EPT), which provide greater returns on investment for exploration blocks; the Small Field Asset (SFA), designed to optimise the value of marginal fields; and the Late Life Asset (LLA), which maximises recovery from mature assets. These incentives have made Malaysia a compelling destination for upstream investment.

Over the past three years, MBR has demonstrated success, with 23 exploration blocks and 14 DRO and LLA awarded through the bidding rounds, achieving commendable success rates of roughly 70%. By highlighting Malaysia’s hydrocarbon potential and facilitating transparent bidding, MBR has played a pivotal role in attracting investments and accelerating upstream activities.

MBR 2024, officially launched on Jan 23, 2024, attracted participation from over 50 O&G companies, government agencies, foreign trade attachés and energy market consultants. It offered five exploration blocks and five DRO clusters. With bid submissions recently closed, the Production Sharing Contract awards will be announced soon, reinforcing PETRONAS’ commitment to driving Malaysia’s upstream growth and collaboration.

To complement the annual MBR, PETRONAS introduced the Malaysia Bid Round Plus (MBR+) in October 2023. While MBR focuses on annual exploration and discovered field opportunities, MBR+ provides a flexible, year-round platform for investors to explore and acquire DRO and LLA outside the regular bidding cycles.

Exclusively available to PETRONAS myPROdata paid subscribers, MBR+ offers a structured, efficient and transparent process that enhances asset monetisation by allowing companies to submit tailored proposals for specific assets. These proposals are then evaluated based on their strengths and suitability.

MyPROdata is a smart platform established by PETRONAS to enhance the investor experience and that offers exclusive access to comprehensive data and insights, empowering investors to make more informed decisions. By leveraging PETRONAS myPROdata, investors are empowered to make well-informed decisions, streamlining the evaluation process and unlocking the value of Malaysia’s prolific basins.

“For the MBR process, potential investors submit their bids in September and October, with contracts typically awarded by November or December and followed by an official announcement. MBR+ offers a faster turnaround, however, with winning bidders usually selected within three to four months of the launch,” Bacho explains.

With over 100 DRO available for evaluation and monetisation, MBR+ plays a critical role in meeting investor demand. The DRO are located in proven basins with well-known subsurface characteristics, supported by data from developed fields.

“Currently, Malaysia has more than 100 DRO ready for evaluation and monetisation. These come from proven basins and are considered ‘good analogues’ because they are smaller fields connected to existing infrastructure. Through MBR+, we aim to enhance these prospects to be more attractive and efficient,” Bacho adds.

MBR+ leverages the wealth of data available in PETRONAS myPROdata, a web platform introduced in 2021. Offering 24/7 access to over 1.1 petabytes of geological, geophysical and subsurface data, this platform empowers potential investors, O&G companies and researchers with detailed and transparent insights into Malaysia’s exploration and production data, enabling more informed decision-making.

“O&G players, investors and academicians can leverage this platform to gain a comprehensive regional understanding, supporting new investments, asset growth, and research and development initiatives,” Bacho says.

He adds that MPM is continually working to enhance the platform, with plans to integrate artificial intelligence to streamline data analysis and attract greater investment.

MPM is intensifying efforts to evaluate the hydrocarbon potential in areas such as Peninsular Malaysia’s Langkasuka Basin and Penyu Basin. Through multi-client 2D and 3D seismic surveys and advanced technologies, MPM aims to map these regions to attract investment and increase the likelihood of hydrocarbon discoveries.

“To tap into this potential, we have launched a new offshore multi-client 2D seismic survey in the northern area of the Straits of Malacca. The aim is to explore and map hydrocarbon potential in open areas within the Langkasuka Basin,” Bacho explains.

Malaysia is home to eight basins, three of which — Malay, Sarawak and Kinabalu — are currently producing. To ensure sustained production beyond 2030, PETRONAS is intensifying efforts to focus on the remaining five non-producing basins: Langkasuka, Penyu, Sandakan, Layang-layang and Semporna. These non-producing basins hold vast hydrocarbon potential, with a collective estimated yield of up to 4.2 billion barrels of oil equivalent in total.

“We are actively mapping the hydrocarbon potential to gather valuable data. With this enhanced information, we’ll be in a better position to engage and attract investors. Our goal is to offer them clear insights and opportunities based on comprehensive data. By pooling larger seismic data, leveraging artificial intelligence and machine learning, we aim to increase the likelihood of significant hydrocarbon discoveries at pace,” he says.

Looking ahead, Bacho envisions Malaysia as a vibrant nation with a dynamic O&G industry that draws long-term investors. He emphasises the importance of leveraging this industry to build a strong and sustainable Malaysia O&G ecosystem.

“The upstream sector is not only a significant revenue generator for Malaysia, but it also plays a pivotal role in nation-building and nurturing local players in the industry. Over the years, we have cultivated numerous Malaysian companies, and it’s exciting to see homegrown players like Hibiscus, Petra Energy, Dialog and Uzma thriving in the upstream sector, beyond just PETRONAS Carigali,” he says.

Bacho also highlights that Malaysia’s fiscal terms are designed to be progressive, making investments in the O&G sector more attractive to contractors. The EPT, one of several fiscal terms offered, ensures optimal sharing of O&G profit between PETRONAS and investors. This capital-intensive business supports contractors’ investments, creating a favourable environment for long-term partnerships.

Bacho says developing the O&G services and equipment (OGSE) ecosystem is key to establishing Malaysia as a vibrant and appealing investment destination.

“Malaysia has more than 3,000 active service providers supporting the upstream sector, with a large number based in Sabah. We have yet to see enough Sabahan participation in this ecosystem. That’s where PETRONAS comes in, building partnerships to enable more credible and capable Sabahan players to participate in the industry. We expect to see growth of Sabahan vendor jobs awarded in 2025,” says Bacho.

“It’s not just about bringing in foreign players; it’s about shaping the industry to benefit the entire value chain. As we move forward, it’s essential that we continue supplying energy to the world with more efficiency and lower emissions. We need to think differently, especially about emissions.

“The strength of MPM lies in our proactive approach to managing resources to maximise their value — not just through licensing or promoting blocks, but by closely collaborating with operators to unlock new opportunities. Ultimately, my vision is for Malaysia’s O&G industry to expand the economic landscape, delivering greater benefits to the nation and its people as we progress into the future.”

MPM is gearing up for MBR 2025, set to take place in the first quarter of the year. This highly anticipated event will offer an exciting opportunity for investors to explore Malaysia’s upstream O&G, including the potential of Sabah areas.

For more information on investment opportunities in Malaysia’s upstream sector and MBR 2025, visit the PETRONAS MPM website at www.petronas.com/mpm.