Critical issues in petroleum development in Malaysia

Abstract

The discovery of petroleum deposits in the offshore areas of Malaysia in the early 1970's promises to act as a catalyst to future development. The production of crude petroleum has increased significantly and has emerged as one of the leading activities in Malaysia today. We are proposing to examine three critical areas in the development of the petroleum industry - petroleum reserves and production, refinery capacity and product prices. It has been predicted that petroleum reserves are limited at present and would be depleted sometime in the beginning of 1990's. With the increasing demand for local crude in refineries, the problem might become worse. By the end of 1970's it is predicted that there is a necessity to expand local refinery capacity to cope with the growth in demand for petroleum products. Ever since the 1973 'Oil Crisis' and subsequent developments, the structure of the product prices in this country has changed with the increase in crude prices.