Malaysia reaffirms Petronas’ contract commitments as trade strategy evolves
Reading Time: 2 minutesMalaysian Prime Minister Anwar Ibrahim has assured that state-owned oil company Petronas will uphold all its contractual obligations with Sarawak’s Petroleum Sarawak Berhad (Petros) in Parliament on 17 February, addressing concerns over the companies’ ongoing negotiations.
Petronas will “maintain all existing domestic and international contractual obligations”, Anwar said, reinforcing the company’s continued role in Malaysia’s energy landscape.
The prime minister’s statement follows Petros’ impending takeover of gas distribution in Sarawak on 1 March under the Distribution of Gas Ordinance 2016. Anwar acknowledged Sarawak’s importance to Malaysia’s energy sector, highlighting that more than MYR 280bn (USD 63.25bn) has been invested in Sarawak’s oil and gas industry since 1976.
“Sarawak has played a crucial role in Malaysia’s energy sector, and these investments reflect its significance in national development,” he said.
Malaysia’s broader energy strategy includes expanding exploration opportunities while maintaining regional partnerships. As part of this, Petronas has launched a bid round for exploration blocks in Peninsular Malaysia and Sabah, north Borneo.
Trade strategy balances economic ties
Investment, Trade and Industry Minister Tengku Zafrul Aziz emphasised Malaysia’s focus on strengthening economic partnerships within ASEAN while maintaining engagement with key global markets.
“The ASEAN-China market is nearly 700 million strong,” he said. “If we deepen our economic cooperation and investment links, we can be the architects of the ‘Asian Century’.”
Tengku Zafrul warned against overreliance on a single economic power, citing concerns over renewed US trade tensions and their potential impact on Southeast Asia.
Malaysia has also prioritised the conclusion of a free trade agreement (FTA) with the EU by 2026, which would broaden market access while preserving flexibility on domestic policies.
“This FTA will be more comprehensive than previous agreements as it covers digital and green aspects,” Tengku Zafrul said. “We have also resolved all outstanding concerns regarding palm oil, with both sides agreeing to comply with established standards.”
Resilient economy supports optimism
Despite global uncertainties, analysts remain confident in Malaysia’s ability to navigate economic challenges. Hong Leong Investment Bank has highlighted Malaysia’s diversified economy and industrial resilience as key strengths.
Business activity continues to expand, with the elevators and escalators market projected to grow at an annual rate of 4.72% through 2030. Meanwhile, outsourcing firm Teleperformance Malaysia has strengthened its presence, particularly in Penang, northwest Malaysia, underscoring investor confidence in the country’s services sector.
The Ibrahim government’s approach to balancing global partnerships with domestic industrial growth will be central to managing economic headwinds in the coming years.