malaysia oil&gas development
TRANSCRIPT
Development in Oil & Gas Sectors in Malaysia
Pui Thai ChongHead, Myanmar Operations, PETRONAS
21 – 23 September 2016
Nay Pyi Taw, Myanmar
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Contents•Who we are•Our core business•Our experiences: Oil & Gas Development• Conclusion
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Agile Development & GrowthTransformation of an NOC into a global energy champion• Founded as an NOC but operating as a public-listed IOC (incorporated as a company)
• Our unique NOC model has helped paved the way for PETRONAS to evolve over four decades into an oil & gas company with international presence
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Our CoreBusiness
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Fully Integrated Business with Diversified International OperationsMaximise and add value to oil and gas assets
Exploration & Production ventures in more than 20 countries LNG in Egypt,
Australia, Malaysia and
Canada
Refineries and petroleum product retail leader in Malaysia and South Africa
Worldwide Operations
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- Export Sector
- Power Sector- Industry Sector
- Residential and Commercial Sectors
- Industrial Sector: Ethylene, Methanol, MTBE, Polyethylene, Propylene, Urea and VCM
- Transportation Sector: Diesel, Gasoline, Jet Fuel and Lubricants
Our experiences: Driving Oil & Gas development
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An established industry:Malaysia’s Oil & Gas industry is established as an attractive and stable investment destination, with many successful projects known worldwide
96 Production Sharing Contracts (PSCs)
5 Risk Service Contracts (RSCs) 22 companies awarded
operatorship and 17 companies as non-operating partners
Malaysia’s E&P Industry
Gumusut-Kakap FPS2nd heaviest topside
6th biggest hull in the world
Kikeh SPAR 1st SPAR in operation outside Gulf of
Mexico
Notes: • FPS is Floating Production System• SPAR is Single Point Anchor Reservoir
93 Producing Fields
189 Discovered Fields
Data as of August 2016Source: 1.1.2016 ARPR
Pengerang Integrated Complex[under construction]
Sabah Oil & Gas Terminal(SOGT)
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Continuous improvements have been made to Malaysia’s Petroleum Arrangements since adopting the PSC system in 1976, to address the ever changing environment to enable monetisation of technically challenging resources
Production Rate/Volume Based
Profitability Based Performance Based
Ensure fair returns/rewards to successful investors based on prospectivity & level of risk
Encourage re-investment to sustain production life of discovered fields and finding new discoveries
Adopt partnership approach in dealing with foreign investors
Create conducive work environment to facilitate business activities
PVB
2012DW Gas
PSC
2011
RSC
2011HP/HTPSC
2008
R/C PSC
1997DW/
Ultra DW PSC
1994
1985 PSC
1985
1976 PSC
1976Concession Agreement
Pre-1976
The conscious “evolution” of Malaysia fiscal terms have managed to spur investments and attract new players into Malaysia E&P over the years
1994 1997 2003 2010
Reduced chargeable tax from 45% to 38%
Deduction of Abandonment CESS
Contribution
Qualifying Plant Allowances, Secondary
Gas Recovery
Investment Tax Allowance, QEE, Small
Field Incentives
The Malaysian Government have been supportive on changes made in the PITA as continuous improvements to attract investment from current players as well as new players.Internal
On the part of Malaysian Government, significant amendments to the Petroleum (Income Tax) Act 1967 (“PITA”) have also taken place to address new business requirements
• Three integrated LNG plants, sourcing supply from over 150 offshore platforms
INTEGRATED
• With total capacity of up to 26 MTPA, one of the world largest LNG production facilities on a single location
LARGEST SINGLE LNG LOCATION
• The new Train 9 commence operation since mid 2016, adding total capacity to 29 MTPA
EXPANDING
PETRONAS LNG Complex
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PETRONAS FLNG 1
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Equivalent to the distance between Huston, Texas to Phoenix, Arizona
Electrical & Instrument cabling of about1,600 km 1 million bulbs
4 million energy saving bulbs100,000 refrigeratorsPower a small city of 100,000 pax
6 times the weight of an LNG carries
Weight
Exploring Opportunities Through Innovation & TechnologyPETRONAS FLNG 1
Knowledge Sharing with PEMEXStrategic Relations, CSR, MPMAugust 2016 ©Petroliam Nasional Berhad (PETRONAS) 2016 11
Thank you
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Supporting Info
Five types of tax incentives are introduced to unlock & monetize stranded resources
• Encourage development of capital intensive projects by contractors (EOR, High CO2 gas field, HPHT, Deepwater, Infrastructure for petroleum operation)• Improve contractors’ cash flow and shorten breakeven point.
1. Investment Tax Allowance(ITA) : 60% of qualifying CAPEX for capital intensive projects
• Improve commerciality of the development
2. PITA tax rate reduction from 38% to 25% for marginal field development
• Full utilization of capital cost deduction could improve project economics.
3. Accelerated Capital Allowance (CA) from 10 years to 5 years for marginal field development
• Improve commerciality of the development
4. Export Duty Waiver on oil produced and exported from marginal field development
• Encourage exploration activity through enhancing contractor’s risk-taking attitude
5. Transfer of Qualifying Exploration Expenditures (QEE)
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Supporting Info
Malaysia experiencePETRONAS has made significant upstream and downstream investments to drive gas development
Creating Market
• PETRONAS LNG Complex (PLC), Bintulu
• Gas Processing Plants (GPP)
• Integrated Petrochemical Complex (IPC)
• Mega Methanol Plants
• Sabah Oil & Gas Terminal (SOGT)
• Peninsular Grid Utilisation (PGU)
• Sabah-Sarawak Gas Pipeline (SSGP)
• Extensive network of offshore gas pipelines
• Floating LNG
0
200
400
600
800
1,000
1,200
1,400
Malaysia Gas Production
In ‘000 barrels of oil equivalent per
day (kboe/d)
Fo
re
ca
st
1983:1st LNG Shipment to Japan
1987: • F6
1992: GPP expansion
Jerneh
1982:• 1st LNG
Plant
~ 15 new gas fields onstream
>30 new gas fields on stream
1984:Duyong & E11/F13W
Labuan Gas Terminal (LGAST 1)
1st Gas Processing Plant (GPP)
PGU I
1985:M3
2008:Labuan Gas Terminal 2 (LGAST 2)
2014:Sabah Oil & Gas Terminal (SOGT)
Kebabangan
Developing natural gas Unprecedented growth in gas
Sustaining gas sales
1980:Samarang
1995:• MLNG• Dua
1997:Sabah Gas Terminal
Lawit
UpstreamDownstream
1998: GPP expansion (GPP5 start-up)
PGU III
1996:M1
2003:B11
MLNG Tiga
Technology
Gas“Highways”
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