Malaysia - Commentary - 2025

(Originally published on February 2, 2026)

Malaysia remains one of Southeast Asia’s most established upstream oil and gas producers. The country has a mature offshore sector, a strong national oil company in PETRONAS, and an active licensing programme designed to attract new investment. However, while the country continues to offer a relatively stable investment environment, recent political and regulatory tensions — particularly between the federal government and the state of Sarawak — have introduced new uncertainties for investors.

In this article I take a look at the current state of Malaysia’s upstream sector, focusing on what we saw during 2025. It examines production trends, investment dynamics, energy transition policies, and the ongoing dispute between PETRONAS and PETROS that is increasingly shaping the sector’s outlook.