The Petroleum Development Act, 1974

The National Petroleum Policy, 1975

The National Energy Policy, 1979

The National Depletion Policy, 1980

The Four-Fuel Diversification Strategy, 1981

The Five-Fuel Diversification Strategy, 1999

Malaysia’s Policy Measures Related To Energy

PDA

PS CONTRACTORS

PSC

Rights to explore, develop and

produce petroleum resources in

Malaysia is vested upon

PETRONAS

Ensure orderly exploration development

and production of Nation’s petroleum

resources

Ensure sustainability of the petroleum

industry in Malaysia

Encourage local participation in the

petroleum industry

Adds value to the petroleum resources

Promotes investment in exploration,

development and production of

petroleum resources in Malaysia

Ensure maximum benefit to the

nation

Adopt the Production Sharing

Contracts (PSC) system

Production Sharing (PS) Contractors

undertakes all financing risks

Stipulates contractual period,

management of operations, recovery of

costs, division of profit, obligations of

parties

OBJECTIVESFEATURES

The Institutional Framework Adopted by the Government for Petroleum Development in Malaysia

GOVERNMENT

PETRONAS

Malaysia Oil and Gas Ranking

Malaysia is ranked 27th in terms of Oil Reserves and 13th in terms of Gas Reserves

Reserve life World ranking

35

18

13

27

GAS

OIL 4,544 (mmbbls)

89.0 (TSCF)

4.8 Billion BOE

BOE = barrels of oil equivalent , mmbbls =million barrels

16.5 TSCF

2,750(mmbbls)

Oil 42%Gas 58%

PETRONAS International Oil and Gas Reserves as at 1.1.2003

Malaysia currently has 77 producing fields, 54 of which are Oil fields & 23 are Gas fields

M’sia / Thai Development Area PM3 Commercial

Arrangement M’sia-Vietnam

S A R A W A K

S A B A H

LNG PLANTS

PENINSULAR

MALAYSIA

Kangar

KUALA LUMPUR

Segamat

Kuantan

Kemaman

Kuala

Terengganu B R U N E I

Bintulu

S U M A T R A (Indonesia)

South China Sea

Kerteh

*Oil & Gas Fields Discovered : 341*As at 1 Jan 2006

Malaysia Gas Development and Utilisation Strategy

Kuala Lumpur

PENINSULAR MALAYSIA

S A R A W A K

S A B A H

More than 20 billion has been invested in the Malaysian Gas Upstream & Downstream Business

Gas Fields Offshore the Peninsular Malaysia & Sabah

Domestic Consumption (Gas as Fuel & Feedstock)

Gas Reserves Offshore Sarawak

Domestic & Export (LNG)

Peninsular Malaysia Operations

Kuala Lumpur

P E N I N S U L A R M A L A Y S I A

Kertih

Pasir Gudang

Damar

Bintang

JernehLawit

Noring

B. Kekwa

Guntong

TapisResak

Angsi

BeranangSeligi

DuyungSotong

Bekok

Tiong

23

5 k

m (

30

”) 34 km

22 km

Gas Field

Oil Field

Segamat

Peninsular Gas Utilisation Project

5

6

500

500

1998

1999

GPP

1

2

3

4

CAPACITY (mmscfd)

250

250

250

250

GAS-IN

1984

1992

1992

1994

Power 69 %Non-Power 24 %Pipeline export 7 %

Lawit

Jerneh

Resak

Duyong

Angsi

Larut

From West Natuna, Indonesia

Kangar

Georgetown

Lumut

Meru

Seremban

Melaka

Johore Bahru

Segamat

Kuantan

Kemaman

KualaTerengganu

Gurun

GPP 1,2,3 & 4

Kuala Lumpur

KertihGPP 5 & 6

Power Station

From Malaysia-Thailand Joint Development Area

From South Sumatera, Indonesia to Peninsular Malaysia

Total Sales Volume : 1.2 tscf

Total Consumption : 1,849 mmscfd

Gas Utilisation

TOTAL INVESTMENT = RM 26 BILLION

TRANSPORTATION:GASOLINE

JET FUEL

DIESEL

INDUSTRIAL:ETHYLENE

MTBE

METHANOL

POLYETHYLENE

PROPYLENE

VCM

EXPORT

Upstream Downstream Markets

POWER :METHANE

DIESEL

FUEL OIL

COMMERCIAL & RESIDENTIAL

OIL

GAS

Products

GAS

PETROLEUM PRODUCTS

PETROCHEMICALS

SALES GAS

LPG

LNG

REFINING

PROCESSING

LIQUEFACTION

CO

ND

ENSA

TES

AROMATICS

UPSTREAMEXPLORATION &PRODUCTION

Strategy of Value-Adding and Integration has helped to spur economic growth

Japan

S. Korea

Taiwan

Others

Total LNG Export (MTPA)

62 %

22 %

15 %

1 %

21.4

Capacity

MLNG

MLNG DUA

MLNG TIGA

8.1 MT/A

7.8 MT/A

6.8 MT/A

LNG Export FY 2005/06

PETRONAS MLNG Complex: One of the World’s Largest LNG Producer with 23 MTPA

Bintulu

Gas has spurred the development of the Petrochemical Industry in Malaysia

Onshore Slugcatcher Kertih Port

Centralised Tankage Facilities

Kertih-Kuantan Railway System

Dungun Water Supply

Centralised Utility Facilities (CUF)

Gas Transmission Pipeline

PETROCHEMICAL PLANTS

A Petrochemical Masterplan Study was undertaken in 1993.

Total investment in petrochemical industry is RM 27 billion.

Peninsular Malaysia Gas Reticulation Network - Gas Malaysia Sdn Bhd (GMSB)

LEGENDGMSB Head OfficeGMSB Regional OfficeGMSB Branch Office

Total volume sold : 73.4 TBtu

Total length : 1259 km(as at end 2005)

Gebeng

Pasir Gudang

THAILAND

Prai

Kuala Lumpur

a. Food & Beverages

b. Rubber

c. Non Metallic Mineral

d. Glass

e. Fabricated & Basic Metal

f. Chemical

g. Electrical and Electronics

h. Paper, Printing and Publishing

i. Textiles

j. Others

The industrial sector contributed 98% of total sales volume

Source: GMSB Annual Report 2005

Gas District Cooling (GDC)

Putrajaya

Universiti Teknologi Petronas (UTP)

Ministry BuildingsPM departmentsConvention Centre

Main campusHostels

R&D Park

In total, the GDC uses approximately 20 mmscfd of gas for it operations

Terminal BuildingAdmin BuildingHotelsOther office building

Kuala Lumpur International Airport (KLIA)

Office BuildingsRetail Centres

Convention CentreHotels

Kuala Lumpur City Centre (KLCC)

Natural Gas for Vehicles (NGV)

Gas Supply : 9 mmscfdNo of NGV Vehicles : 20,643*(mostly taxis, trucks and buses)

Number of NGV Stations*In operation : 46Under construction: 20Under tender & evaluation : 10

Target by FY07 : 72

As of June 2006