Brazil remains key market in Petronas' global strategy
Responding to recent news reports, the national oil company said Brazil remains an important market where it has built a significant, integrated position across the energy value chain, from upstream production and logistics to downstream retail and lubricants.
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The Star
13 hours ago
- The Star
PETRONAS' PUSH TO CREATE MALAYSIA'S VIBRANT UPSTREAM ECOSYSTEM
PETRONAS MPM aims to unlock five new frontier basins in the country. MALAYSIA'S oil and gas (O&G) sector is asserting enduring significance and robust growth potential driven by the inherent dynamics of resource abundance, technological innovation and persistent global demand. This critical industry, a bedrock of the economy, continues to unlock new opportunities and sustain vital energy supplies. While Malaysia embraces a responsible energy transition, the fundamental value and strategic importance of its hydrocarbon wealth remain undeniable, with the sector's trajectory defined by its foundational role in meeting both national and global energy needs. Malaysian Petroleum Management (MPM) senior vice-president Datuk Bacho Pilong stated that the upcoming decades are set for continued growth, evidenced by the heightened upstream momentum last year, which coincided with Petroliam Nasional Berhad's (PETRONAS) 50-year anniversary. Over the past half-century, Malaysia's oil production has experienced a twenty-fold increase, from over 100,000 barrels per day in the 1970s to over two million barrels per day in 2024. Last year, PETRONAS also secured RM50bil in upstream investments and signed a record 14 product sharing contracts (PSCs) with 12 operators. 'From our humble beginnings in 1974, PETRONAS and MPM have grown leaps and bounds,' said Bacho. 'Last year, we awarded the highest number of blocks (14) the country has ever done. 'Our role is about creating a future for the industry, to ensure its prominence for the decades to come. I believe that PETRONAS' future could be even more exciting than the past fifty years,' said Bacho. — IZZRAFIQ ALIAS/The Star 'This is thanks to the mature infrastructure network, progressive fiscal terms, enhanced transparency and a skilled talent pool, crucial for the industry to flourish. 'This stability provides investors with the certainty to come in and invest in the country.' Bacho added that MPM's role goes beyond being a mere regulatory arm, as the organisation aims to actively shape the future of the industry, accelerating growth and global competitiveness. 'Our role is about creating a future for the industry, to ensure its prominence for the decades to come. I believe that PETRONAS' future could be even more exciting than the past fifty years,' he said. These strategic undertakings represent a pivotal phase in PETRONAS' bold transformation journey as an integrated energy company, one that goes beyond maintaining its traditional upstream excellence by 2035. 'We are reimagining Malaysia's role as a regional energy leader through innovative partnerships, cutting-edge technology and asset excellence,' said Bacho. 'This transformation encompasses our evolution as a progressive energy and solutions partner, where every business decision – from frontier basin exploration to portfolio enhancement – serves the larger vision of delivering sustainable, competitive energy for the next decade and beyond. 'This comprehensive shift is what we call PETRONAS 2.0 – building tomorrow's energy ecosystem today, ensuring Malaysia remains not just relevant but essential in the global energy transition,' he added. Untapped resources Bacho shared that to invigorate the sector, PETRONAS, through MPM, plans to reactivate dormant oil basins in the country via strategic partnerships, untapping unutilised reserves. He explained that, in total, Malaysia is home to eight basins. These comprise the Malay Basin, Penyu Basin, Langkasuka Basin in Peninsular Malaysia, Sarawak Basin, Layang-Layang Basin, Kinabalu Basin, Tawau Basin and Sandakan Basin in East Malaysia. 'Just imagine, all this time, our playing field was limited to three basins. But, in the decades to come, it will be expanded to eight basins. There are five dormant basins just waiting to be activated,' he said. 'So, we must attract more investments to capitalise on these opportunities, to unlock this growth potential.' Each of these basins offers distinct geological potential and commercial advantages, backed by enhanced subsurface data, improved fiscal terms and viable infrastructure networks. This year, the production sharing contracts for the Mutiara cluster in the Sandakan Basin and the Temaris Cluster in the Malay Basin were successfully launched and awarded to Dialog Resources Sdn Bhd and Seascape Energy Asia (One) Sdn Bhd respectively. Additionally, strategic technical evaluation agreements (TEAs) were signed with major industry players such as BP, TotalEnergies (France) and Eni (Italy), for the Langkasuka and Layang-Layang basins. Bacho described Sabah as a potential investment opportunity, as there are many blocks available in the state's untapped basins. Recently, Japanese company Inpex Corporation made a comeback into the country, with plans mooted for the Tawau Basin. In the 1960s, the company began expanding abroad, including exploration in Sabah under Sabah Teiseki Oil Co (a subsidiary of Teikoku Oil), and drilled five oil wells at the southeastern tip of Sebatik Island, off the coast of Tawau. Catalysing investments To activate and streamline the operations of these basins, MPM is forming strategic collaborations and partnerships with potential investors. This is done through Malaysia Bid Round (MBR), an annual exercise to develop upstream initiatives and offer investors different opportunities to grow their energy portfolios. MBR 2025 is offering a balanced portfolio with five exploration blocks and three discovered resource opportunities (DRO) clusters in Malaysia. 'Malaysia remains an attractive and vibrant exploration and production (E&P) investment destination for potential investors,' said Bacho. He added that a game-changer in attracting investment interest has been the PETRONAS myPROdata platform. Bacho said this system provides greater access and transparency to Malaysia's E&P data, encapsulating over 100 petabytes of accumulated seismic, production and field data over the past five decades. Access to these datasets eases the decision-making process for investors, enabling them to make well-informed decisions on their investments. 'This can be a catalyst for the industry. By sharing this data with investors, at a nominal subscription fee, we speed up their decision-making and de-risk exploration for them,' said Bacho. He disclosed that MPM will be spending roughly RM500mil annually for five years to acquire valuable seismic data. This initiative, he says, bolsters investor confidence. Coupled with the re-entry of major players into the country and the continued high demand for O&G from the Global South, it highlights the potential for an upward trajectory in the industry. 'It's about confidence in many aspects: our geology, our regulatory systems, our stable market prices. The moment investors have this confidence, it paves the way for more investments,' Bacho affirmed. MPM also recently introduced Malaysia Bid Round Plus (MBR+), an initiative that allows players to bid on relinquished blocks without waiting for the next annual bid round. This flexibility, exclusively available for PETRONAS myPROdata subscribers, ensures continuous opportunities for new operators and investors. To date, MPM has launched two MBR+ licensing rounds with 100% take-up rates. In addition to the PETRONAS myPROdata platform, MPM employs the Right Asset, Right Player (RARP) strategy. This strategy involves the clustering of assets, classified as late-life assets, small-field assets and so on, depending on their maturity. This effectively matches E&P players with assets that align with their niche capabilities, maximising value creation for all parties. 'Different operators have different focuses, priorities and approaches. With RARP and MBR+, we can utilise the assets to the fullest, and extract more value from them, so it's a win-win for everybody,' Bacho explained. Responsible energy management In line with the National Energy Transition Roadmap (NETR), to achieve net-zero carbon emissions by 2050, Bacho emphasised that while the industry continues to drive economic growth and ensure energy security, embedding emission management from the outset is no longer an option, but a fundamental aspect of operations. A proactive stance is critical, as failure to address emissions could lead to challenges, particularly in securing crucial financing for projects. 'The difference between back then and now is that, in production, emissions are now managed upfront. It is part of the plan as built-in mechanisms and no longer an afterthought,' said Bacho. 'We must ask ourselves, 'Can we manage the emissions?', 'Can we capture the released gas?'. It's about a change in thinking for us all.'
The Star
2 days ago
- The Star
Analysis-Argentina's copper dreams need infrastructure - but who will build it?
SAN JUAN (Reuters) -Argentina holds rich copper deposits in the mountainous north along the Chilean border, but, unlike its mining powerhouse neighbor, has not built power lines and roads needed for new projects backed by miners such as BHP and Rio Tinto. President Javier Milei's austerity campaign to clamp down on inflation and debt means the South American country is up against bigger challenges than most countries to build the infrastructure needed by mines worldwide. Unconventional ideas, such as sharing infrastructure between miners or paying for it with royalties, will likelybe part of the solution. "The government said it won't provide any funding, but that doesn't mean it isn't responsible for getting things done," said Roberto Cacciola, president of Argentina's mining chamber, who is urging authorities to step up efforts to ensure infrastructure gets built. Argentina exports gold, silver, and lithium but has not produced copper since 2018. Milei's administration, as well as governors who control local development, are banking on copper to help stabilize the country's volatile economy, just as mining companies worldwide seek to boost output to cover a looming supply gap for the metal widely used in construction and electric vehicles. A federal official said the government is assessing infrastructure needs nationwide and identifying ways the private sector could play a role. Eight copper projects in Argentina could bring total mining export value to $15.4 billion by 2030, according to a government forecast. That would more than triple last year's figure and make the sector one of the country's largest net foreign exchange earners. Copper projects alone could reel in $5.2 billion by 2030, if they reach the government's projection of producing 521,000 metric tons a year. The copper projects are concentrated in the northern province of San Juan, which some call the "Vaca Muerta of copper," an allusion to Argentina's shale oil and gas field the size of Belgium. San Juan enacted a compensation program in 2022 that could help get infrastructure built. It allows mining companies that develop road or energy infrastructure to be repaid with mining royalties if provinciallegislators deemthe project a "public utility." Miners normally pay royalties to governments. The Vicuna project, from global miner BHP and Canada's Lundin, hopes to use the provision, said Vicuna's Argentina director Jose Morea. "That speeds up investments that the private sector is currently in a position to make ... which the provincial government would probably have to defer otherwise,"he said in an interview. Vicuna consists of two mines, Filo del Sol and the more advanced Josemaria, which could become one of the region's first projects to start production. The $5-billion mine will need a 220-kilometer (137-mile) road - a distance of about two or three hours by car - to reach operations at an altitude of 4,200 meters (13,780 feet) in the Andes Mountains. It will also require a high-voltage power transmission line at a scale that could support a large city. SHARING INFRASTRUCTURE Some miners are exploring other ways to reduce costs. McEwen Mining's Los Azules is looking at sharing infrastructure with nearby projects and has consulted the Inter-American Development Bank about infrastructure loans. Some business leaders want the government to turn over more projects, such as railways and road maintenance, to the private sector through public tenders or public-private partnerships,said Nicolas Munoz, a copper supply analyst at consultancy CRU. "It's feasible to think that private companies will assume these costs and see a business opportunity," Munoz said. There are already signs of interest from the mining sector, such as global miner Rio Tinto, which recently took over U.S.-based Arcadium's lithium mines in Argentina and is developing another of its own in the country. According to a public register of lobbyist meetings, Rio held a meeting with Argentina's mining secretary in June after expressing interest in bidding for the state's Belgrano Cargas railway, which the government said in February it would privatize. Rio Tinto did not have an immediate comment. Rio Tinto is also backing McEwen's Los Azules and Aldebaran's Altar copper projectsthrough shares owned by its leaching technology arm, Nuton. Some governors are still looking to the federal government to take part of the burden. Governor Gustavo Saenz of Salta, where Canada's First Quantum Minerals wants to develop the Taca Taca copper mine, said aqueducts, roads, and gas pipelines will pay off. "We need them to give us ... everything necessary so that those who want to come and invest can do so," he said this week at the Argentina Copper 2025 conference in San Juan. (Reporting by Lucila Sigal, Writing by Daina Beth Solomon, Editing by Rod Nickel)
The Star
2 days ago
- The Star
Analysis-Investors betting voters in Bolivia will make a turn to the right
(Reuters) -Bolivia's international bonds have rallied ahead of a fiercely contested presidential election, fueled by investors' hopes that a political U-turn could help shore up the country's fragile economy and pave the way for an IMF program. The South American nation of 12 million people is engulfed in a crisis marked by inflation at a four-decade high, dwindling dollar reserves and a fiscal squeeze in which the government must choose to service debt or pay for fuel and food imports. Bolivia's international bonds, however, have enjoyed a stellar rally since the start of 2025. With a return of more than 30%, they are one of the top performers in JPMorgan's emerging markets bond index, which across the asset class has returned slightly more than 7%. Citigroup recently upgraded its assessment on Bolivian bonds to "neutral" from "underweight." Having started the year below 60 cents, Bolivian government bonds have scaled multi-year highs in recent days and are trading in the mid-70 cent range - well above the 70 cent threshold below which debt is seen as being in distress. A change in government "is likely to be quite positive for the economy, which has been on an unsustainable fiscal and current account position for so many years," said Carlos de Sousa, emerging markets debt strategist at Vontobel Asset Management. "A restructuring could be avoided, particularly if the country gets an IMF program soon after," de Sousa said, adding that turning to the International Monetary Fund for support would be a political choice. Bolivia's political landscape is dominated by a power struggle that has fractured the incumbent left-leaning Movement to Socialism (MAS) party. Polls show it winning about 12% of the vote in the first round of the elections on August 17. Evo Morales, who ruled the country from 2006 to 2019 under the MAS banner, has been barred from running for another term as president. Betting websites peg the chances of a win for center-right businessman Samuel Doria Medina, the National Unity party's presidential candidate, at more than 50%. Favored by markets, he has pledged to restore central bank autonomy, tackle a dollar shortage and take on corruption. To avoid a runoff, which has been scheduled for October 19, a candidate must secure more than 40% of the vote as well as have a lead of at least 10 percentage points. IMF LOAN PROGRAM The election is taking place at a critical time for Bolivia's $50 billion economy. Central bank-financed fiscal deficits have become a major flash point, revenues from gas exports - a big source of hard currency for the government - have dwindled and the central bank has been forced to spend precious reserves defending the boliviano currency's peg to the dollar. The gap between parallel and official exchange rates has blown out to 80%, the IMF says. Despite the recent spurt of optimism, investors remain worried that political infighting and falling gas export revenues could jeopardize the country's ability to service upcoming debt payments - large chunks of which are due in the first quarters of the next three years. Bolivia's external debt amounted to about $13.3 billion by the end of 2024, of which $1.8 billion is in hard-currency bonds and the remainder in multilateral and bilateral loans, according to its central bank. Foreign exchange reserves were at a record low of about $165 million in April, central bank data shows. JPMorgan calculates that the country's liquid reserves are only $100 million. The IMF puts reserves at two months worth of imports - well below the minimum threshold of the equivalent of three months. Earlier this year, the three major credit rating agencies downgraded Bolivia's rating deeper into junk. S&P Global said the economic circumstances could impair the government's ability to service debt over the next six to 12 months. Some relief may come from loans worth more than $1 billion from official lenders like the World Bank and the Japan International Cooperation Agency that have been secured but not drawn down amid government infighting, and which analysts expect could be unlocked by a new government in La Paz. Monetizing Bolivia's vast lithium deposits could also bring in financing. But the real silver lining - at least for investors - would be an IMF loan program. It would, however, require painful reforms. The IMF said in May that the Bolivian government should ditch the dollar peg, lift capital controls and phase out fuel subsidies, among a raft of other policy changes. It estimates Bolivia's economy will grow 1.1% in 2025 and 0.9% next year - less than half the 2.2% growth expected across broader Latin America this year and the 2.4% forecast for the region in 2026. With a balance of payments crunch looming, analysts say, the next government might not have much choice. "All these liberalizing reforms will eventually allow the economy to flourish, but there's going to be some short-term pain as you shut down money-losing businesses, cut fuel subsidies, and unshackle the economy," said Ajata Mediratta, partner at Greylock Capital Management. "Very few countries can do that in an election year." (Reporting by Johann M Cherian in Bengaluru and Rodrigo Campos in New York; editing by Karin Strohecker, Christian Plumb and Paul Simao)
