BMI View: Malaysia's long-term crude oil production will be hit as investment in deepwater exploration and production is curtailed amid low oil prices. The start-up of Petronas' PFLNG1 in H216 initiates a string of projects over 2016-2020 that will boost Malaysia's natural gas production. Aggressive capex cuts by Petronas will result in reduced production post-2020.
|e/f = BMI estimate/forecast. Source: National Sources, BMI|
|Crude, NGPL & other liquids prod, 000b/d||676.8||647.6||620.3||594.5||569.6||550.9||530.7|
|Refined products production, 000b/d||534.8||529.4||524.1||529.4||534.7||540.0||702.0|
|Refined products consumption & ethanol, 000b/d||696.9||725.0||747.0||780.8||811.4||841.6||872.9|
|Dry natural gas production, bcm||64.5||62.6||61.3||62.2||63.1||64.3||65.6|
|Dry natural gas consumption, bcm||32.5||33.2||33.5||33.8||34.8||35.7||36.8|
Latest Updates and Key Forecasts
We forecast Malaysia's crude oil production to remain on a downtrend over 2016 to 2025. Weak oil prices limit the attractiveness of boosting output, as demonstrated by Petronas' large spending cuts for the coming four years. Furthermore, we do not expect new final investment decisions in deepwater and marginal projects in the next several years given their high breakeven cost.
We expect refined fuels production to remain relatively stable over the coming years, rising in 2020 with the start of the 300,000b/d RAPID refinery.
Malaysia's oil consumption will grow at a slower rate over the next decade as a result of weakening economic growth and falling energy intensity weighing on demand. The consumption mix will remain dominated by diesel and gasoline over our forecast period.
With the fall in crude oil production and the coming online of the RAPID oil refinery in 2020, we forecast that Malaysia will become a net crude oil importer by 2020. The country will remain a net importer of refined products throughout our forecast period.
The start-up of Petronas' PFLNG1 in H216 initiates a string of projects over 2016-2020 that will boost Malaysia's natural gas production. Aggressive capex cuts by Petronas will result in reduced production post-2020.
New production from a pipeline of gas projects coming online during 2016-2020 will result in stagnating net gas exports over the first half of our forecast period. Thereafter net exports will decline sharply on the back of falling domestic production.
The Malaysia Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Malaysia including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
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