PETRONAS

Upstream

CONTENTS
ABOUT PETRONAS

FULLY INTEGRATED VALUE CHAIN

GLOBAL PRESENCE

DOMESTIC PRESENCE

INVESTMENT & PARTNERSHIP OPPORTUNITIES

10

EXPLORATION

12

DEVELOPMENT

16

PRODUCTION

18

UNCONVENTIONAL

22

LIQUEFIED NATURAL GAS

24

MAKING IT POSSIBLE

26

ADVANCING TECHNOLOGY & ENGINEERING

28

PEOPLE DEVELOPMENT

32

HEALTH, SAFETY & ENVIRONMENT

36

COMMUNITIES

38

CONTACT US

40

ABOUT
PETRONAS
Petroliam Nasional Berhad (PETRONAS) is Malaysias fully integrated oil and gas
multinational with proven capabilities in a broad spectrum of the petroleum value chain.
Building on the success of managing Malaysias oil and gas field resources, PETRONAS
has grown into a major global oil and gas company.
PETRONAS strives to contribute to the wellbeing of the people and nations wherever
it operates by developing and adding value to oil and gas resources in a manner that
carefully balances commercial, environmental and social considerations.

Fortune

Global 500
2

PETRONASANNUALREPORTPE2011

FULLY INTEGRATED VALUE CHAIN

Full Upstream and Downstream Capabilities

A Exploration,
Development and
Production

Crude Oil

Natural Gas

Our capabilities spread across a broad

portfolio, across every stage of the oil
and gas development and across the
total value chain

Dato Wee Yiaw Hin

Executive Vice President & Chief Executive Officer,
Upstream, PETRONAS

B Refining

D Liquefaction

C Processing

E Liquefied
Natural Gas (LNG)

F Petroleum Products
Transportation
Sector - Diesel,
Gasoline, Jet Fuel
and Lubricants

G Petrochemical Plant H Liquefied Petroleum

Gas (LPG)
Industrial Sector Ethylene, Methanol,
Residential and
MTBE, Polyethylene,
Commercial Sectors
Propylene and Urea

I Processed Gas/
Peninsular Gas
Utilisation (PGU)
System
Power Sector
Industrial Sector

As one of the worlds leading oil and gas producers, our

global operations include exploration, development and
production of crude oil and natural gas in Malaysia and
abroad; liquefaction, sale and transportation of LNG;
processing and transmission of natural gas and the sale of
natural gas products; refining and marketing of petroleum
products; manufacture and sale of petrochemical
products; trading of crude oil, petroleum products and
petrochemical products; and shipping and logistics
relating to LNG, crude oil and petroleum products.

This extensive experience which spans the entire

value chain of the oil and gas industry has allowed
us to work alongside various host governments to
develop their respective national Gas Masterplans,
replicating the success we have in Malaysia to many
countries abroad.
Consistently, we have demonstrated that we are
good partners with host governments and other oil
companies in monetising oil and gas resources.

J Regasification
Terminal
Export Sector

Canada

United Kingdom

Ireland

Uzbekistan
Turkmenistan
Iraq
Algeria
Egypt
Myanmar
Mauritania

Suriname

Chad

Sudan

Cameroon

Vietnam
South Sudan

Thailand*
Malaysia

Brunei

Indonesia

Australia

Mozambique

*MalaysiaThailand Joint
Development Area

GLOBAL PRESENCE
Proven Upstream Capabilities

PETRONAS Upstream is a fully integrated business across the oil and gas value chain,
with full ownership and accountability of exploring, developing, producing and
monetising oil and gas resources both domestically and internationally.
On the global front, we are a renowned operator known for our resilience and
distinctive capabilities in the upstream sector.
PETRONAS upstream capabilities and track record of successful onshore and offshore
developments in the oil and gas industry have earned us reputable operatorship in many
ventures across the world.

349
offshore
platforms

195

ventures in
22 countries

2013 Achievements:

Global Business Dimensions:

Overall Resource Replenishment Ratio (ORRR) of 3.1

2,131 kboed of total upstream production
21 greenfields first oil and gas production
322 mmboe of reserves developed
15 new discoveries
3,223 mmboe of resource addition
Total E&P Business Capital Expenditure (CAPEX) of USD10.8 billion
with exploration expenditure of USD1.4 billion
Total Gas Business Capital Expenditure (CAPEX) of USD 3.16 billion

105 partners
Over 14,000 employees
More than 82 development E&P projects
198 producing oil and gas fields
Over 500 drilled exploration and development wells
125 rigs onshore and offshore
23 FPSO / FSO
6 major LNG projects
4 unconventional assets

Our Experience in Resource Playtypes:

Heavy oil
Deepwater
Basement oil
Tight gas

Onshore
HPHT
EOR

High CO2 Gas

Coal bed methane
Shale gas

This map
representing
oil and gas
activities in
Malaysia is
for illustration
purposes only

Gas Fields

DOMESTIC PRESENCE

8,467

km

pipeline

Oil Fields

22.6

bboe
discovered resources

Our Dual Role

Resource Owner / Host Authority and Operator

Malaysia Business Dimensions and 2013

Achievements:

As a resource owner and host authority in Malaysia, we are responsible for the effective
management and sustainable development of the countrys oil and gas resource base.

100 PSCs and 4 RSCs

85 producing oil fields
60 producing gas fields
576 kboed liquid production
6,271 mmscfd natural gas production
10 discoveries in Malaysia
333 platforms
31 rigs

As an operator, we aim to maximise upstream value, sustain production and enhance

prospectivity of the nations acreages.

Representation of upstream facilities in Sarawak. This schematic map is

for illustration purposes only and is not drawn to scale.

INVESTMENT &
PARTNERSHIP OPPORTUNITIES

Growth Opportunities for the Future, Together

Since our inception, we have attracted
large foreign investments into Malaysia,
and built strategic partnerships with
leading oil and gas contractors in Malaysia
and internationally.
In Malaysia, we have been successfully
developing the nations oil and gas
resources for four decades. Despite
maturing basins and fields, we have
enhanced production, whilst increasing
the prospectivity of Malaysia acreages
through various de-risking efforts.
Indicative of abundant upstream
opportunities, the number of oil and gas
fields under exploration, development,
and in production in the country has also
risen over the years.
In an effort to continuously attract
investments, we form various partnerships
through innovative Production Sharing
Contracts (PSCs) and Risk Service
Contracts (RSCs).

4
10

RSCs

100

PSCs

Through PSCs, our partners bear

all exploration, development, and
production costs in return for an agreed
share of production. A variety of PSC
terms are designed to encourage an
optimal level of investment based on the
complexity of petroleum resources.
RSCs were introduced in 2011 as a new
solution to attract niche partners with
the desired capability and technology to
grow our resources. In RSCs, PETRONAS
assumes the role of project owner whilst
contractors are service providers with
equity share in the RSC. Upfront capital
investment by the contractors will be
recovered upon production, together
with a fixed fee for services rendered,
based on their performance, relevant
to the development execution and
subsequent production.
Malaysia presents a host of investment
opportunities as it offers a strategic
location, modern infrastructure, reliable
transport networks, political and fiscal
stability, among others.

333
platforms

11

EXPLORATION

Maximising Resources for Growth

We are exploring 35 basins in over 18 countries worldwide, across various operating

environments including shallow water, deepwater, deserts, swamps and sparsely
inhabited areas.
On the domestic front, the deep basin knowledge gathered over the years, coupled
with innovative technology applications have made Malaysia a top country in the region
in terms of exploration success.
These include opportunities in new basins and countries which provide materiality,
through the application of new technologies.
Worlds first 3D Broadband Circular Shooting Survey
Worlds first 3D Constant Gradient Slant Streamer Survey
Joint development of the first High Power Shallow Water surface towed CSEM source
First Airborne Full Tensor Gradiometry Survey
3D Full Wave Seismic for imaging through gas cloud
Imaging solution with 3D Finite Difference Modelling
In the international arena, we continue to high-grade the quality of our exploration
assets. In countries that we are already producing, we focus on organic and value
growth through both near fields and new plays exploration.

12

13

Standout
performer
Malaysia contributed 72% of total
upstream exploration discoveries
with 1.4 billion boe in Southeast Asia
in 2012

15

discoveries in 2013
10 Malaysian discoveries
5 International discoveries

HPHT vertical wells in Malaysia 4,830 metres depth with

12 gas bearing reservoirs
Basement oil play Vietnam, Malaysia
Deepwater exploration Mozambique, Egypt, Cuba,
Mauritania, Brunei, Malaysia
14

Kuang
North,
Sarawak

new discovery of 4.2 tcf GIIP

from a Cycle II carbonate
formation exploration well

HPHT exploration Egypt, Malaysia, Turkmenistan

Tight gas Oman
Carbonates exploration Malaysia, Indonesia
Precarbonates Malaysia

15

DEVELOPMENT
Delivering Excellence

Superior Project Management

PETRONAS Upstreams Project Management System is a structured approach, ensuring
project delivery is safe, cost effective and competitive. Regardless of project complexities,
we comply with stringent Health, Safety and Environment (HSE) standards, PETRONAS
Technical Standards and global best practices.

Innovative Project Delivery

PETRONAS Upstream employs innovative workflows and processes for effective
development design and planning. These efforts have earned us significant cost
savings and enabled projects to be delivered ahead of time, while providing a greater
return on investment.

World
record

Sepat oil Phase 1 achieved

1st hydrocarbon within 12
months. Substantially faster
than industry average of 28
months. IPA Benchmark
(2012)

Worlds
first

Pilot implementation of
a refurbished wellhead
platform concept at D21,
a marginal field in Malaysia
(2012)

Worlds heaviest
External turret Floating
Production Storage
Offloading (FPSO)
First Deepwater field
employing the first Truss
Spar Floating Production
Unit outside the Gulf of
Mexico (2012)

Platform construction
at Gumusut Kakap,
Sabah, Malaysia
(2012)

82

Development Projects
Worlds first use of composite bridge plug system for production testing purposes in Kuang North field, Malaysia
Borneos longest: Sabah-Sarawak Gas Pipeline (SSGP) of more than 500 km to transport offshore natural gas to
processing terminals
Kanowit: Malaysias first subsea well with a potential of producing 100 mmscfd from each well
16

17

PRODUCTION
Optimising Growth

Converting Maturing Brownfields

PETRONAS Upstream has implemented various brownfield rejuvenation
efforts, effectively extending the production life of oil and gas fields with
Improved Oil Recovery (IOR), Improved Gas Recovery (IGR) and
Infill Drilling technologies.
Through innovative strategic alliances with international contractors,
we have repeatedly improved a reservoirs recovery factor and asset
integrity, whilst arresting declining production in domestic and
international fields.

Overall
21
greenfields
first oil and gas production
in 2013 from Malaysia and
international operations

18

Equipment Excellence
(OEE) of platform
performance in Malaysia
for Oil 92% and Gas 96.9%
in 2013 for E&P business;
96.4% for Gas business

24

IOR | EOR | IGR

production enhancement
projects underway in
Malaysia

19

Enhancing Yields with Innovative Technologies

New developments in deepwater exploration and production, Carbon Dioxide (CO2)
management technologies and High Pressure High Temperature (HPHT) technologies
have opened up new opportunities for growth and monetisation.

Upstream Total Production

in 000 boe per day

3.5%

2007

2008

2009

2010

2011

2012

2013

2014

2015

Turkmenistan fully operational to support future gas

production increase at the capacity of 500 mmscfd
Mauritania Chinguetti field one of the producing assets
in Mauritania with a reserve volume of 11,652 kbbl
20

2016

2017

The outlook for PETRONAS production

and resource addition is a healthy 3.5%
Compound Annual Growth Rate (CAGR)
over a period of ten years

Higher yields: 440 mmscfd of raw high CO2 gas at Tangga

Barat cluster fields, first application of membrane type
CO2 removal technology

21

UNCONVENTIONAL

Venturing Into New Frontiers

PETRONAS is accelerating upstream
growth by venturing into new frontiers
with unconventional gas through
strategic acquisitions and partnerships
with leading oil and gas operators.

In 2012, Progress Energy Canada Ltd

(PECL) was acquired by PETRONAS,
bringing in a portfolio of unconventional
assets in Alberta and British Columbia
with over 200 tcf of gas in place.

A joint venture between PETRONAS and

Santos in Australia allows us to develop
one of the worlds first Coal Bed Methane
(CBM) into an LNG processing facility
with a 420 km pipeline.

We are leveraging strategic partnerships

and PETRONAS experience across the
integrated value chain to export and
monetise this gas through the Pacific
Northwest LNG project.

Worlds 1st
Coal Seam
Gas (CSG)
to LNG
Project
PETRONAS embarks on CSG to LNG
projects with 7.8 MTPA (onstream
target 2015) at Queensland, Australia

22

420

km
of underground gas
transmission pipeline
from project site to the
liquefaction facility

60

tcf
over potential
recoverable
resource

1.4

million acres
of land
position

23

LIQUEFIED NATURAL GAS

Optimising Gas Monetisation

As the worlds second largest exporter of liquefied natural gas (LNG), PETRONAS
remains at the forefront of global LNG supply, poised to meet growing energy
demand in both the Pacific and Atlantic Basins. We have reliably delivered 8,400
cargoes across thirty years, supplying our long-term buyers in Asia as well as meeting
emerging demand across the world.
In 2013, we kicked-off construction of the worlds first floating LNG facility. Upon delivering
first LNG in early 2016, the first PETRONAS Floating LNG (PFLNG1) facility will change
the landscape of the LNG business in Malaysia, enabling us to unlock and monetise gas
reserves in marginal and stranded fields.
We are growing our global LNG portfolio through new ventures, including unconventional
gas. In Queensland, Australia, we are developing one of the worlds first Coal Seam Gas
(CSG)-to-LNG projects. The Pacific Northwest LNG facility (PNW LNG) in Western Canada
will enable us to monetise North Americas shale gas production.
Key to PETRONAS integrated LNG business and reputation as reliable supplier is the LNG
fleets. PETRONAS charters 23 of the 29 LNG ships owned by MISC, the worlds largest
owner-operator of LNG tankers. With a combined capacity of 3.67 million cubic meters,
our fleet makes up 8% of the worlds total LNG shipping capacity.
Each of PETRONAS LNG facilities employs the latest technology to boost efficiency,
using less power and improving production to ensure stable supplies of LNG. With
LNG facilities in four strategic locations across the globe, we are positioned to deliver
a safe, reliable supply of energy to power millions of homes and many industrial
complexes around the world.

Worlds 1st
Commercial Floating Liquefied
Natural Gas facilities with
1.2 mtpa capacity (targeted
commissioning end of 2015)
PETRONAS PFLNG1

24

Worlds
Largest
LNG production facilities
with capacity of 25.7 million
tonnes per annum (mtpa)
PETRONAS LNG Complex

8%

Of the worlds LNG

shipping capacity

25

PETRONAS
facilities &
hydrocarbon plays

Shallow water

Coal Bed
Methane
Conventional
non-associated gas

Tight
sand gas

Sandstone

Deepwater

Ultra-Deepwater

Conventional
associated
gas

Oil

Gas-rich shale

MAKING IT POSSIBLE

PETRONAS Upstreams Strength and Capabilities

We have explored some of the worlds most challenging terrains to secure new reserves.
Additionally, we conduct deepwater exploration, entering also into highly complex HPHT
reservoirs and wells with high CO2 content to enhance our yields.
Our growth portfolio includes unconventional oil and gas - which include shale gas and
Coal Bed Methane.

26

Today, we are amongst the worlds first in maximising recovery of discovered fields with
Enhanced Oil Recovery (EOR) efforts.
Advanced technologies are applied alongside new strategies to rejuvenate brownfields,
extracting maximum value from existing reservoirs.
In consistently delivering some of the worlds first pipelines, platforms and projects,
we have brought oil and gas onstream ahead of schedule providing rapid return on
investment for our partners, stakeholders and investors.

Our Experience in Resource Playtypes

Heavy oil
Deepwater
Basement oil
Tight gas

Onshore
HPHT
EOR

High CO2 Gas

Coal Bed Methane
Shale gas

27

ADVANCING TECHNOLOGY
& ENGINEERING

Development and Deployment of Technologies

Excellence in Project Delivery
PETRONAS Technical Global is the centre for technical expertise and solutions, focused
on finding unique and innovative answers to the challenges of project management and
delivery in Upstream. Through its continuous efforts in refining and complementing our
technical expertise with new and innovative techniques, Technical Global provides the
Upstream business in PETRONAS with the capability to deliver greater value with speed,
efficiency and safety.

Technology On the Cutting Edge

PETRONAS has done groundbreaking work in technology, positioning ourselves as
a leader in oil and gas technology as we race to develop effective solutions for the
industrys operational needs. Through two centres of excellence, Technical Global and
Technology and Engineering Division, we address the challenges of ageing facilities,
maturing fields, high CO2 gas fields and hydrocarbon impurities such as mercury, acid
and sulphur through our patented technologies, developed through innovation and
strategic partnerships in research and development.

28

29

PETRONAS Patented Technologies

HycaPure Hg
A proprietary ionic liquid mercury removal technology that
removes mercury in its elemental, inorganic and organic
forms which are present in natural gas feeds.

ProAssure Clamp
A leak containment solution made of advanced
lightweight and corrosion resistant composite materials.
Its fabrication method provides clear cost advantage and
quick delivery even for non-standard sizes.

SolidClenz
A unique chemical formulation to remove organic and inorganic
solid deposits in production well tubing and well bores for improved
Return on Investment (ROI) on chemical treatment.

FnGMap
A three-dimensional fire and gas mapping visualisation
software that accurately determines the optimal
locations for fire and gas detectors within a facility.
PN-1 Multi-Layer Membrane
PN-1 membrane improves separation
efficiency by using properties of
multiple membrane fibres.

iCON
A steady-state and dynamic process simulation software
for the enhancement of operational performance, design
and process optimisation.

Sep-iSYS
A separation system that is highly effective for sand
removal, waxy & fouling services and heavy slugging &
sloshing facilities.

Up to

HycaPure Hg
Innovation in
contaminants
removal technology

reduction in CAPEX for

development of high
CO2 content gas fields

international and
local awards

30

40%

SmartCen
An online real-time metering supervisory system designed for all
metering operations which support centralised data for remote
monitoring, diagnostics and analysis.

JEC Europe
Innovation
Award
2014 ProAssure
Clamp

Up to

50%

footprint and weight

reduction with Sep-iSYS
separation system

31

PEOPLE DEVELOPMENT
Ensuring a Sustainable and Skilled Talent Stream
People are the driving force of our business. For every hour we put out in the field,
we spend hundreds more in training and development. We provide structured
capability development programmes to upskill our diverse talent stream across
geographical boundaries.

Advancing Technical Capabilities

We have developed strong partnerships with our learning partners which include
Institut Teknologi Petroleum PETRONAS (INSTEP), PETRONAS Leadership Centre (PLC),
Universiti Teknologi PETRONAS (UTP) and Malaysian Maritime Academy (ALAM) to
advance our technical capabilities.
PETRONAS is the only national oil company in Asia to offer live simulation
training facilities as part of its capability development programme for technicians
and operators. At the integrated Oil and Gas training centre, hosted at INSTEP,
a simulation drilling rig will be used for programmes conducted by the
UMW-INSTEP Drilling Academy (UIDA). The facility also hosts live upstream and
downstream training plants to complement INSTEPs flagship programme, the
Petroleum Technology Programme (PTP).
Through our collaborations with service companies, contractors and joint venture
partners, we provide on-the-job training programmes to heighten our employees
skills and expertise for superior performance and delivery.

32

33

UPSTREAMS CAPABILITY DEVELOPMENT FRAMEWORK

UN
C
CA ON
PA V
BI
L

N
ARBO
ROC ORK
D
HY MEW
AL FRA
N
.
O V
TI DE
EN ITY
Build Upstream
capabilities in
unconventional
hydrocarbon field
development

L E A

HSE

T
EN

TE
C

Develop and sustain

Upstream production
operations and
capability in meeting
operational excellence
targets

H I P

S
ICAL KILL G
HN

S COMPE
UP
TE
O
R
E R

V
Y DE ELOPM
NC

Provide broader
knowledge for drilling
engineers to
understand and better
appreciate other
disciplines and
divisions

Develop
competent and
capable geoscientists
contributing to
business targets

Develop wholesome
petroleum engineers
with better
appreciation of the
Upstream value chain

Enhance project
management
capability to improve
project performance
and delivery

Note: Several new academies are being established including Commercial and LNG Academies to cater for growing business needs.
34

35

HEALTH, SAFETY & ENVIRONMENT

Committed to HSE Excellence
Stringent HSE management practices, in line with international standards and best
practices, are applied at every level of our business activities to safeguard our people,
environment, assets and reputation. In doing so, we are focused on having the right
leadership, commitment, culture, mindset, systems and tools.

4.5

million
safe manhours without LTI:
Myanmar

36

8.6

million
safe manhours without LTI:
Turkmenistan

37

COMMUNITIES

Socio-Economic Development

Communities and Capability Building

We actively undertake community projects in countries where we operate, adding value
to the local skills and capabilities of the people towards long-term sustainable growth.
We work closely with local governments to provide basic needs such as safe drinking
water, shelter and healthcare.
Additionally, we embark on social, environment, education and community projects.

MALAYSIA: Implemented more than 70 community projects along the Sabah Sarawak Gas Pipeline involving
road construction and repairs, construction of paddy fields and community halls, water supply and refurbishment
materials to upgrade existing longhouses Participation of more than 200 students in the high achievers
programme from various secondary schools in Sabah More than 70 graduates from the Kimanis Training Centre
in Sabah Created about 3600 jobs during the construction period of the Sabah Sarawak Gas Pipeline

38

SOUTH SUDAN: Provided 6 months of industrial

training for South Sudanese UTP students

MYANMAR: Upgraded the government technical

high school in Kanbauk for youths aged 14 to 16

INDONESIA: Sponsored computer packages to

7 schools in Sampang, East Java

IRAQ: Established the Garraf Vocational Training Centre to

provide locals with the opportunity for skills development.
39

For further information, please contact:

Corporate Affairs & Administration

PETRONAS Upstream
Level 24, Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Center, 50088 Kuala Lumpur, Malaysia
Tel: +603 2051 5000 Fax: +603 2026 5050
www.petronas.com
Please visit our Corporate Website for more information on our
other businesses and related subsidiaries.

Glossary of Terms
boe

barrels of oil equivalent

E&P

- Exploration & Production

CSEM

Control Source Electro-Magnetic

EOR

Enhanced Oil Recovery

FDP

Field Development Plan

FPSO

Floating Production Storage Offloading

FSO

Floating Storage Offloading

kbbl

thousand barrels of oil

kboed

thousand barrels of oil equivalent per day

km

kilometres

LTI

Loss Time Injury

mmboe million barrels of oil equivalent

mmboed million barrels of oil equivalent per day
mmscf

million standard cubic feet

mmscfd million standard cubic feet per day

mmstb

million stock tank barrels

MTPA

Million Tonne Per Annum

OEE

Overall Equipment Excellence

ORRR

Overall Resource Replenishment Ratio

tscf

trillion standard cubic feet

2014 PETROLIAM NASIONAL BERHAD (PETRONAS)

All rights reserved. PETRONAS makes no representation or warranty, whether expressed or implied, as to the accuracy or completeness of the facts presented.
PETRONAS disclaims responsibility from any liability arising out of reliance on the contents of this publication. All data represented are as at end December 2013.

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www.petronas.com