Malaysia Oil And Gas Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Malaysia Oil And Gas Market Trends and Insights

Surging Demand for Refined Petroleum Products

Regional fuel consumption recovery and new mobility trends stimulate refinery utilization rates across Southeast Asia. The Pengerang Integrated Complex entered commercial service in November 2024 with 300,000 barrels-per-day capacity, underpinning Peninsular Malaysia’s aspiration to supply deficit markets in Indonesia, Vietnam, and the Philippines. Petronas Chemicals is constructing a 33,000-tonnes-per-annum chemical recycling plant due in 2026, embedding circular-economy practices into the downstream landscape. These projects lock in crude intake for upstream producers and frame Malaysia as a processing hub rather than a pure exporter of crude.

Untapped Deep-Water Reserves in Sarawak & Sabah

Frontier acreage in the Langkasuka and Layang-Layang clusters offers sizable gas and condensate potential that requires high-spec rigs, subsea tie-backs, and floating LNG solutions. The Malaysia Bid Round 2025 listed five exploration blocks and three Development and Risk-sharing Option clusters to catalyze investment. ConocoPhillips and Shell have shifted portfolio capital toward gas-weighted developments to maximize LNG feedstock security. The stable PSC framework and Petronas’ role as resource custodian shorten lead times from discovery to first gas, enhancing the long-term competitiveness of the Malaysia oil and gas market.

Rising Asian LNG Demand Lifting Malaysian Exports

Industrial activity and power-sector switching in North Asia sustain a premium on spot LNG, reinforcing Malaysia’s status as the fifth-largest global LNG exporter. The Bintulu complex’s 30 million-tonnes-per-annum capacity allows flexible cargo scheduling that supports both regional spot sales and term contracts. Petronas’ agreement discussions with Commonwealth LNG secure destination diversity, while the Trans Thailand-Malaysia Gas Pipeline offers swing gas between domestic and export markets. Stable LNG margins enable reinvestment in feed-gas fields and new floating regas assets, supporting broader resilience in the Malaysia oil and gas market.

Downstream Petrochemical Integration Momentum

Peninsular Malaysia hosts the RAPID refinery-petrochemical complex that blends crude processing with aromatics and olefins output. New derivative units such as specialty elastomers enhance value capture across the chain. Investor confidence was demonstrated by a USD 3.5 billion project financing closed in December 2024 for the Pengerang Energy Complex, which focuses on paraxylene and benzene streams for Asian polyester demand. Integrated assets drive economies of scale, attract feedstock from East Malaysian fields, and underpin sustained product exports.

High Crude-Price Volatility

Brent fluctuations between USD 70-90 per barrel in 2024-2025 disrupted cash-flow planning, deferred some final investment decisions, and raised borrowing costs. Marginal field economics remain sensitive to price dips, particularly where enhanced recovery requires costly gas lift or chemical injection.^{[2]The Edge Malaysia, “Volatile Oil Prices Keep Spending in Check,” theedgemalaysia.com} The Malaysian Oil, Gas and Energy Services Council’s appeal for fiscal relief underscores exposure to market swings. While hedging and cost optimization help, sustained volatility may temper the pace of deep-water and decommissioning commitments.

Global Energy-Transition Investment Shift

Institutional investors now benchmark portfolios on Scope 1-3 emissions, prompting higher hurdle rates for green-field hydrocarbons. Development banks have tightened lending criteria, favoring renewables and energy-storage projects. Petronas responded with a RM 15 billion diversification pledge toward low-carbon businesses, balancing decarbonization with core hydrocarbon cash generation. Although the Malaysia oil and gas market remains investible, heightened ESG scrutiny lengthens due diligence cycles and raises capital costs.

Segment Analysis

By Sector: Upstream Dominance Drives Growth

The upstream segment captured 75.4% of the Malaysia oil and gas market size in 2024, buoyed by robust PSC activity and Petronas’ project pipeline. Jerun, Kasawari, and Gumusut-Kakap Redevelopment sustain plateau output while offsetting natural decline rates. The Malaysian oil and gas market share leadership in upstream activities reflects a geology rich in gas-condensate plays and a supportive fiscal regime that accelerates field monetization.

Upstream investment momentum will likely continue through 2030 as international operators secure acreage in deep-water wells and marginal redevelopments. Concurrently, midstream operators face rerouting challenges once the Sabah-Sarawak Gas Pipeline retires in 2027, requiring alternative evacuation for East Malaysian gas. Downstream players benefit from new feedstock when upstream debottlenecking releases incremental condensate volumes that feed into Pengerang’s reformers.

Note: Segment shares of all individual segments available upon report purchase

By Location: Offshore Leadership Reflects Resource Geography

Offshore production accounted for 71.8% of 2024 volumes and underpins the Malaysian oil and gas market, thanks to mature shelf fields and frontier deep-water discoveries. Subsea tie-backs optimize utilization of a 10,000-kilometer pipeline grid and 380 fixed platforms, enabling quick commercialization of satellite finds.

Decommissioning adds momentum as 37 platforms and 153 wells are slated for removal by 2027, creating revenue streams for plug-and-abandonment contractors. Onshore output, although smaller, remains competitive due to lower lifting costs in mature Peninsular clusters. Cross-border assets such as the Trans Thailand-Malaysia line demonstrate how onshore corridors complement offshore hubs by providing evacuation flexibility.

By Service: Maintenance Gains as Infrastructure Ages

Construction services accounted for 46.3% of the market in 2024, driven by EPC activity on RAPID, Kasawari, and shallow-water redevelopment projects. However, maintenance and turnaround services are anticipated to grow at a rate of 5.9% annually through 2030, mirroring the asset integrity challenges posed by aging infrastructure. Petronas’ RM 4 billion Asset Integrity Backlog Clearance program anchors a multiyear maintenance backlog that spans corrosion mitigation, pipeline pigging, and topside refurbishment.

Specialized decommissioning firms are gaining traction as 56% of Malaysia’s offshore installations exceed their design life.^{[3]Scottish Enterprise, “Malaysia Decommissioning Outlook 2025-2030,” scottish-enterprise.com} Integrated lifecycle offerings that combine production units with plug-and-abandonment scope, such as T7 Global’s mobile offshore production solution, illustrate service evolution. Digital twins and AUV-based inspection further widen opportunities for technology vendors in the Malaysia oil and gas market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Peninsular Malaysia and the East Malaysian states of Sarawak and Sabah collectively anchor the Malaysia oil and gas market through complementary resource and infrastructure advantages. Peninsular Malaysia is home to the Pengerang Integrated Complex, several legacy refineries, and cross-border gas connections that facilitate supply to Singapore and Thailand. East Malaysia, by contrast, hosts prolific offshore gas plays that feed the Bintulu LNG complex, sustaining export volumes despite rising domestic demand. The differing profiles create intra-country synergies as pipelines and shipping lanes integrate resource flows.

East Malaysian basins attract the bulk of exploration capital due to their deep-water potential, lower sulfur content, and adjacency to North Asian LNG buyers. Petronas and its partners leverage floating production and subsea tie-backs to minimize time to market, while concession terms encourage marginal field clustering, which improves project economics. The Malaysia oil and gas market, therefore, benefits from scale efficiencies in logistics, subsea fabrication, and well services that are concentrated around Labuan and Miri service hubs.

Infrastructure renewal remains a key challenge, particularly the planned decommissioning of the Sabah-Sarawak Gas Pipeline in 2027. Soil instability and geohazard risks have forced repeated shutdowns since 2014, signaling the need for alternative evacuation routes, such as new offshore pipelines or expanded LNG trucking capacity.^{[4]Pipeline Journal, “Sabah-Sarawak Gas Pipeline Decommissioning Plans,” pipeline-journal.com} On Peninsular Malaysia’s west coast, brownfield refineries are upgrading units to Euro 5 specifications, supporting regional product trade and reinforcing Malaysia's oil and gas market as an ASEAN distribution node.