PETRONAS to account for $42bn in Malaysia’s income: PM

KUALA  LUMPUR (ICIS)–Malaysia’s Prime Minister Najib Razak said on Monday that state-owned PETRONAS is expected to generate Malaysian ringgit (M$) 131.4bn ($42bn) in gross national income as the country aspires to become a regional energy hub.

The oil and gas major is also expected to create over 50,000 new highly-skilled jobs “as it looks to galvanize Malaysia’s upstream sector, expand domestic downstream production and venture into clean energy,” he said.

Najib Razak was speaking at opening of the 2013 Asia Oil and Gas Conference (AOGC) held in Kuala Lumpur, Malaysia, which runs on 9-11 June.

The past years have seen PETRONAS venturing out – making forays into shale gas in Canada, coal bed methane in Australia and intensive enhanced oil recovery efforts.

In its home base, the company is also pursuing a $20bn refinery and petrochemical integrated development (RAPID) project in Johor.

The oil and gas industry plays a pivotal role in Malaysia, with a 40% contribution to the national income, Najib said.

The Malaysian economy mains resilient, having posted 5.6% growth in 2012 because of a “robust investment pipeline and a healthy expansion of domestic consumption”, he said.

Among its future challenges include pursuing further liberalisation of the economy to sustain investor interest and, rationalising subsidies, the Malaysian PM said.

The whole of Asia is expected to remain the “brightest prospect” in the global economy, with internal demand driving growth, notwithstanding current weakness seen in China, he said.

China reported a weaker-than-expected annual export growth of 1% in May, with imports contracting 0.3%, raising concerns about a hard landing for the world’s second biggest economy.

“For much of the world, and for our region in particular, China’s prospects affect confidence in our own,” Najib Razak added.

China’s growth momentum is fading amid weak external demand in its key export markets, but the northeast Asian country is “still set to be the world’s largest economy within the next three years”, Najib said.

($1 = M$3.1)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections