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Malaysia Expects Its Oil Production To Peak Next Year

Malaysia’s state-owned oil and gas company Petronas has forecast the country’s crude oil production will peak in 2024 at around 2 million barrels of oil equivalent daily.

The bulk of Petronas’ output is natural gas and it will remain this way, the company’s head of exploration and production, Adif Zulkifli, said at the Energy Asia conference, as quoted by Reuters.

Natural gas accounts for between 60% and 70% of Petronas’ hydrocarbon production.

"We continue to look for more gas portfolio, but of course, there is commitment in Malaysia, I think we need to continue to do some oil exploration to fill up our refineries," Zulkifli said.

Despite expectations of peak production, Petronas is looking for gas production expansion opportunities abroad, the executive also said, noting the Canada LNG project, where it holds a 25% stake, will add some 700,000 barrels of oil equivalent daily to its total.

Based on the company’s own production figures, however, oil and gas output appears to have peaked last year. The daily average of Petronas in that year stood at 2.4 million barrels of oil equivalent, Reuters noted.

A day earlier, the secretary-general of OPEC forecast that global oil demand will rise to 110 million barrels daily by 2045, with overall energy demand rising by 23% over that period.

Meanwhile, the Malaysian company is also looking to diversify into other areas: it announced this week a business venture with TotalEnergies and Japanese Mitsui for the development of carbon capture and storage capabilities.

Carbon capture and storage is drawing growing interest from the oil and gas industry as pressure from activists and governments increases to reduce their emission footprint by any means necessary.

Activists are not big fans of CCS but some oil and gas companies tend to see it as a move that makes the most sense for them in comparison to entering wind and solar power.

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By Charles Kennedy for Oilprice.com

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