KUALA LUMPUR (Feb 27): PETRONAS said it is shifting its spending on exploration activities towards Peninsular Malaysia amid the ongoing dispute with the Sarawak state government.
The shift reflects uncertainties in East Malaysia that have eroded investors’ confidence and operating conditions for the national oil and gas company, officially known as Petroliam Nasional Bhd, said Mohd Jukris Abdul Wahab, the head of its exploration and production division.
“We do see a little bit of reduction… particularly, if we slice and dice between regions,” he said at a news conference. “We have started to shift the exploration spending more towards the Peninsular Malaysia side.”
PETRONAS, which reports only to the prime minister, is caught in between the federal government and the increasingly assertive Sarawak state vying for greater autonomy.
The latest bidding rounds have also focused more on Peninsular Malaysia at a time when the tussle is playing out in the courts over the extent of PETRONAS’ rights to operate in the state.
Broadly, PETRONAS is committed to its plan to spend up to RM50 billion as capital expenditure annually, with around 60% allocated to Malaysia, PETRONAS president and group chief executive officer Tan Sri Tengku Muhammad Taufik said at the same news conference on Friday.
Domestic spending fell to about RM25 billion in 2025 from RM33 billion, a decline due to the company wanting to “make sure the projects could be delivered economically”, he said. “That is challenging going forward, as there is cost inflation meeting head-on with softening prices.”
Most of the upstream spending in Malaysia was on the development of PETRONAS’ third floating liquefied natural gas facility, decarbonisation of the Kasawari gas field in Sarawak, and growth projects for PETRONAS Gas Bhd (KL:PETGAS).