Petronas To Take A Hit From Pullout, But Sees Long-Term Domestic Gains

One of them is the Refinery and Petrochemical Integrated Development (RAPID) project in the Pengerang Integrated Complex (PIC) development in Malaysia's southern state of Johor. The PIC is Petronas' biggest downstream project, worth $27 billion in total investment. Prime Minister Najib Razak, who is expected to announce economic stimulus measures ahead of general elections that must be called by mid-2018, has said RAPID will create jobs, raise standards of living and boost the economy in Johor, a key electoral state.

"That is where I expect funds to go into, said Peter Lee, Asia oil and gas analyst at BMI Research. "The focus is domestic first. They would always like to invest in and maintain production at home before going overseas," Lee said, adding he doesn't expect Petronas to make any significant new investments in the near term.

RAPID, which includes a 300,000-barrel-per-day oil refinery producing gasoline and diesel, is targeted to begin operations in the first quarter of 2019.

Petronas is also expected to focus on other large-scale domestic projects, such as its second floating LNG vessel and developing gas fields in offshore East Malaysia, which could boost jobs and projects within the local oil and gas industry.

(Reporting by Emily Chow; Editing by Bill Tarrant)


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