The history of oil and gas in Malaysia starts from the beginning of 20th century, when it first discovered

in Sarawak on 1909, and first produce the next year. In 1975, petroleum concession was granted by
state government, which oil company have exclusive right to explore and produce resources. The
companies then paid royalties and taxes to the government, in return.
Malaysia is rich with these natural resources. Our country is the 25th largest oil reserve, and 14th largest
gas reserves in the world. The total reserves is of order of 18.82billion barrels oil equivalent (boe), and
crude oil production rate is 600 000 barrels per day. Malaysia has coverage of 494 183km 2 of acreage for
oil and gas exploration which include 337 167km2 in offshore continental area, and 63 968km2 deep
water (depth more than 100ft or 300m). The acreage is split into 54 blocks, and out of it, 28 blocks (205
500km2) are operated by PETRONAS Carigali Sdn Bhd, and seven other multinational oil company in
2005.
In oil and gas engineering, the process start with exploration, which analysing and interpreting seismic
data to determine the potential of hydrocarbon reserves, and drilling of test wells. Then the process
continues with conceptual development, screening studies is performed to determine the most efficient
and cost efficient method to produce potential hydrocarbon sources. This would include selection of
facilities, whether floating or moored structures, the transport of hydrocarbon from field to customer,
corrosion mitigation strategies and safety aspect of the operations.
The third process is the development of the project. This includes the construction, detailed
engineering, and optimum well location, transport of facilities to location and commissioning of
facilities. The last process is production process, which consist of maintenance of strategies, planning
budgets, analysis of supply and demand, and retrofit work to maintain or meet new production targets.
The Malay basin is relatively mature location due to its hydrocarbon reserves. To increase the
production, lots of works must be done such as find new suitable reservoir that been previously
overlooked. The production from deep waters need new technology which cover aspects such as the
ability to drill wells in deep waters, and to analyse and install sea bottom facilities to deliver the
hydrocarbon to topside facilities. On the operational side, Malaysia needs to develop a support base
that can handle the challenges of maintaining deep water facilities at reasonable cost.
The other challenges faced are contaminant gases that would affect the metallurgy of production
facilities. Gaseous such as carbon dioxide and hydrogen sulphide is unsalable, and may cause corrosion
in piping lines. These gaseous have to be remove from the hydrocarbon before being sent to onshore
terminal. However, the demands for these gases have become financially advantage to this field.
Oil and gas industries are split into upstream and downstream sectors. Upstream includes the
exploration and extraction of crude oil. On the other hand, downstream is refining of the crude oil. The
Petroleum Development Act 1974 governs both sectors of petroleum industry under which PETRONAS is
part of. The objective is to make sure the local company were involves. One of the requirements to
obtain license is being a local company.
Due to this act, the oil and gas industry was fully developed by the mid 80s.