With huge offshore reserves, high-tech plant and experienced workers, Sarawak is ideally positioned to develop its refining, trading and downstream petrochemicals processing industries.
The oil-based sector, including natural gas, is one of SCORE’s ten priority industries, offering great potential for investors and for bringing prosperity to the people of Sarawak.
The SCORE region has the experience, the knowhow, the resources and the reserves to support major oil industry projects, from refineries and tank farms to sophisticated petrochemicals processing.
Sarawak possesses at least 800 million barrels of proven oil reserves, but recent offshore finds and the first onshore discoveries for 20 years, in the area around Miri, mean that this probably underestimates the potential.
Malaysia has 4 billion barrels of proven oil reserves. It is the second-largest Southeast Asian oil producer and the world’s second-largest exporter of liquefied natural gas, after Qatar. The SCORE region’s oil industries capital, the port of Bintulu, already has the world’s largest single-site LNG production facility and the world’s first gas-to-liquid conversion plant, producing 15,000 barrels a day of clean, high-value diesel and engine oil.
Offshore, Petronas and Royal Dutch Shell are combining to invest USD12 billion, over 30 years, in a production-sharing agreement aimed at recovering up to 750 million barrels of oil from partly-depleted fields off the Sarawak coast.
By 2030, Asia’s net oil imports are expected to reach 37 million barrels a day. In response to this long-term opportunity, the Sarawak state government is working with Petronas to undertake joint technical, commercial and economic feasibility studies and develop the Sarawak Petrochemical Master Plan, a comprehensive roadmap for the industry’s future.
As increasingly stringent environmental policies drive up the cost of energy and alter global energy supply patterns, most of Asia’s new refinery projects will be based on a mixed slate of crude oils imported from around the world.
The SCORE development strategy revolves around establishing new oil and gas processing plants in Samalaju, attracting investments in independent refineries and tank farms for trading in oil and liquids and promoting a wide range of downstream petrochemicals investment projects.
The expertise and experience are already here, alongside the huge energy reserves, and both state and federal governments are keen to provide the right incentives, infrastructure and business environment to encourage major investments.
Financial help and tax breaks are available for new investors, with a particular emphasis on encouraging upstream investment in exploration work in marginal fields and promoting enhanced oil recovery (EOR) projects. Approved EOR schemes can attract capital expenditure allowances of up to 100%.
The oil-based industries could potentially create 6,200 jobs in the SCORE region by 2030, making a GDP contribution of up to USD3.5 billion.
Much of the focus will be on Samalaju, which will become a major international centre for oil and gas trading and the petrochemical industries, specialising in producing high-quality fuel to comply with ever-stricter environmental specifications in Asia’s key markets.
There will be a particular emphasis on serving the needs of China, which has an energy demand growth rate of 10% and will account for two-thirds of the export market.