Petronas upstream capex rises 19pct, bolstering oil and gas outlook
KUALA LUMPUR: Malaysia’s oil and gas sector will be supported by continued upstream investment, offshore activity and recurring contact income amid rising concerns on the renewed Middle East tensions that pushed Brent crude price back above the US$100 per barrel (bbl) level.
Malaysia's oil and gas sector is set to benefit from increased investment in upstream activities, offshore operations, and recurring contract income, despite rising concerns over Middle East tensions. Petronas, Malaysia's national oil company, reported a 19% increase in capital expenditure (capex) in the first half of 2026 (1H26) to RM8.7 billion, compared to the previous year.
However, this surge in investment is primarily driven by the upstream segment, as downstream business accounted for 63% of the total capex, with additional funds directed towards the Pengerang Refining Company and Pengerang Petrochemical joint venture. The research firm RHB expects Brent crude prices to moderate, with a forecast of US$89 per barrel for 2026 and US$72 per barrel for 2027.
This favorable oil price environment is anticipated to bolster upstream activity, while elevated freight rates could provide potential upside for shipping companies such as MISC Bhd. The strong earnings outlook for Malaysia's oil and gas sector is attributed to recurring contract income, ongoing offshore activity, and robust order book visibility.
RHB Research maintains a confident stance on the sector, issuing a 'Overweight' rating and highlighting MISC and Dialog Group Bhd as top picks.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
