O&G sector must treat volatility as ‘new norm’, says Petronas CEO
Tengku Muhammad Taufik Aziz says normal production and trade patterns are not expected to return until 2027.
Petronas' CEO Tengku Muhammad Taufik Aziz warns that the oil and gas sector must view energy volatility as the new standard rather than considering major disruptions as isolated crises. Speaking at the commencement of Oil and Gas Asia (OGA) 2026, Tengku Taufik emphasized that Petronas does not anticipate global oil production and trade patterns to revert to normal before 2027.
He attributes the Gulf production shutdowns to between 5.5 million and 6 million barrels a day in July, and acknowledges that oil flowing through the Strait of Hormuz remains significantly disrupted as of August. Tengku Taufik insists that industries should start treating volatility as part of their routine existence, citing past disruptions in 2008, 2014, and 2020 as proof that volatility has become a permanent feature of the market rather than a series of rare incidents.
Despite these disruptions, he maintains that long-term energy demand continues to be robust, particularly in Asia. In fact, he predicts that natural gas demand in the Asia-Pacific region will increase by about 4% this year, constituting nearly half of the total global gas demand growth. Furthermore, oil demand in Southeast Asia has risen to approximately five million barrels a day, even as regional production declines and import reliance heightens.
Tengku Taufik stresses that energy security has become an intrinsic aspect of the model, no longer confined to periods of crisis. He also underscores that hydrocarbons will maintain a crucial role in the global energy mix, even amidst the ongoing energy transition. Despite their shift towards cleaner energy sources, hydrocarbons are not set to become obsolete systems, especially in transport, industrial activities, and the infrastructure necessary for the transition itself.
Tengku Taufik finally revealed that Petronas intends to maintain Malaysia's oil and gas production at two million barrels of oil equivalent per day through 2028. This goal will be achieved through sustained investments in exploration, deep-water development, and enhanced recovery from Petronas' producing fields. Additionally, the CEO mentioned that Petronas' vendor development program has benefited 173 vendors, securing about RM9 billion in contract awards since its establishment in 1993.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
