Economic Analysis of Methane Emission Reduction Opportunities in the Malaysian Oil and Gas Sector

Malaysia is the largest natural gas producer and second largest crude oil producer in southeast Asia. Moreover, it is also the fifth largest exporter of liquified natural gas (LNG) globally. The country has set an ambitious target to achieve net-zero by 2050. PETRONAS, one of the leading O&G companies in Malaysia, has announced its signatory membership in the United Nations Environment Programme (UNEP)’s Oil and Gas Methane Partnership 2.0 (OGMP2.0).

PETRONAS’ involvement in OGMP2.0 signifies the urgent need to report and mitigate methane emissions. These are great strides towards reducing methane emissions. However, the question remains as to how much it would cost the Malaysian O&G sector to abate its emissions. This project aims to develop a systematic approach to evaluate the marginal abatement cost for methane emission reduction in the upstream stages of the O&G sector in Malaysia.

The outcome serves as an essential guide for stakeholders to decide which abatement strategies to prioritise and offer them baseline information for negotiation with local authorities.