PETRONAS SEEKS ALLIANCE IN NEW GROWTH AREAS

KUALA LUMPUR, June 8 (Bernama) -- National oil company Petronas, is
seriously considering potential opportunities for collaboration, alliances and
partnership in new growth areas, its Vice President, Corporate Strategic
Planning, Md. Arif Mahmood said.

He said Petronas is keen on unconventional oil and gas sectors in regions
with high potential and new sources of energy beyond oil and gas.

"The bottom line is to optimise value from the many investments either in
Malaysia or in other parts of the world, to pursue growth and sustainability,"
he said at the 15th Asia Oil and Gas Conference here, Tuesday.

Md. Arif said the rising shale gas production in the United States,
increasing investments in Canadian oil sands and the growing significance of LNG
production via coal bed methane (CBM) projects, are some of the telling signs
that, "unconventional will soon become conventional."

Hence, he proposed that National Oil Companies (NOCs) and International Oil
Companies (IOC) stretch alliances and partnership to the next level, to tap
opportunities in the next wave of investments.

Petronas, he said, has always been pursuing growth beyond just the comfort
zone of traditional focus areas, as well as into non-conventional play.

This has allowed the company to pursue expansion in countries such as
Venezuela and Iraq. The former is known for its deeply entrenched resource
nationalism policy and the latter, its unstable domestic political
situation.

"Despite the highly challenging environment, these new ventures present an
unprecedented opportunity for Petronas to secure access to reserves and expand
global reach beyond the low-risk environment, to selected high risk areas," Md.
Arif explained.

In addition, Petronas has also made its first footprint in unconventional
gas play via the development of the Gladstone Liquified Natural Gas (LNG)
project in Queensland, Australia, which is basically a CBM to LNG project, he
said.

Going forward, he said, among the challenges for NOCs is that of technology
and innovation.

"It is considered a weak area for most NOCs because by the nature, they are
set up as implementers and doers instead of creators and drivers like the
IOCs," he added.

He said despite the international prowess of many NOCs, the industry is yet
to see the drive towards innovaton unleashed fully, to the same extent as among
IOCs.

Hence, NOCs will need to institutionalise research and development with
proper and sustained capital allocation in order to build capacity and
capability in technology.
-- BERNAMA