Kuala Lumpur: Petroliam Nasional Bhd (Petronas) must face new demands in the energy transition era to remain relevant amid current economic uncertainties and geopolitical tensions. Its president and group chief executive officer, Tan Sri Tengku Muhammad Taufik Tengku Aziz, emphasized the importance of cleaner and lower carbon intensity hydrocarbon production to reduce greenhouse gas emissions and address methane leaks according to standards.

According to BERNAMA News Agency, Tengku Muhammad Taufik stated that obtaining gold certification for oil and gas methane partnership (OGMP) 2.0 is essential. Petronas has initiated efforts to avoid flaring or routine venting of gas, with more than 20 assets already practising zero routine flaring. In the medium to long term, the company plans to accelerate offerings such as carbon capture and storage (CCS) and specialty chemicals, which he believes requires the right platform and investments.

Tengku Muhammad Taufik highlighted that Petronas must undergo a transformation to prepare for a low-carbon energy system. He noted that the company needs to shift from a production-oriented approach to understanding market demands, producing only what consumers are willing to buy, particularly in terms of capability and needs. This marks a shift from traditional LNG supply to markets like Japan, which may no longer suffice.

Petronas is focusing on high-value assets and implementing strategic portfolio optimization to support sustainable growth. The company is increasing or reducing holdings to optimize capital allocation, improve returns, and strengthen focus. Tengku Muhammad Taufik mentioned that selling assets with potentially higher carbon emissions and replacing them with new ones to extend production life from the upstream sector is part of this strategy.

For the downstream sector, he added that if asset divestment impacts margins, Petronas will replace them with assets that offer more stable margins and are less exposed to uncertainties. He cited Gentari, a clean energy solutions company wholly owned by Petronas, as an example of entities that, although potentially less profitable, are less exposed to uncertainties.