Malaysia Petroleum Management
PETRONAS remains committed to achieving Net Zero Carbon Emissions (NZCE) by 2050 – a core component of its Energy Transition Strategy. As the first oil and gas company in Asia to make a Net Zero pledge in 2020, PETRONAS continues to lead the way in balancing energy needs with decarbonisation through innovation, collaboration and responsible resource management.
PETRONAS, through Malaysia Petroleum Management (MPM), the custodian of Malaysia’s petroleum resources, is taking active steps to reduce greenhouse gas (GHG) emissions across Malaysia’s Upstream sector. To drive this effort, MPM has established GHG emission limits, outlined in its guidelines to the Petroleum Arrangement Contractors (PACs). This is complemented by comprehensive monthly reporting systems encompassing exploration, development and production operation activities.
In addition to initiatives targeting the elimination of flaring and venting emissions, MPM drives PACs to adopt advanced technologies and innovative practices to mitigate combustion emissions. A cornerstone of this effort is the mandatory annual validation of equipment efficiency, achieved through the Structured Energy Trending and Performance Assessment for Combustion Engine (SETPACE) or equivalent measures. This tool identifies machines’ performance gap and forecasts future fuel gas demands based on operational trends. A data-driven approach, it enables proactive interventions to reduce energy use and lower GHG emissions effectively.
Driving efficiency improvements at the PAC level directly contributes to Malaysia’s emission reduction goals. These collaborative efforts play a vital role in advancing the country’s decarbonisation agenda as well as our broader commitment to global climate objectives.
What is SETPACE?
SETPACE, an in-house digital tool ideated and developed by PETRONAS’ Upstream Business, is a structured methodology to streamline and address decarbonisation of combustion. This tool enables Energy Landscape Assessment where it is designed to:
- Validate the authenticity of fuel gas flowmeter readings based on machine duty and performance
- Quantify energy consumption based on machine-specific operational requirements
- Quantify fuel efficiency degradation by comparing theoretical versus actual fuel consumption for individual machines based on current operating regimes
- Quantify Energy efficiency improvement opportunities
By establishing a fuel gas consumption baseline for each turbomachine, SETPACE identifies machines’ performance gap and forecasts future fuel gas demands based on operational trends. This data-driven approach enables proactive interventions to reduce energy use and lower GHG emissions effectively.
SETPACE not only ensures efficient use of resources but also supports PETRONAS’ goal of reducing costs and minimising environmental impact.
Key Achievements
SETPACE was initially piloted by PETRONAS Carigali across three sites in 2022 and subsequently replicated both domestically and internationally following impressive results. By 2023, SETPACE was integrated into the fuel gas forecasting processes at all PETRONAS Carigali operated sites, resulting in a reduction of approximately 1.21 MilltCO2e GHG emissions in 2024. Additionally, SETPACE led to a 9% reduction in Energy Intensity across 38 facilities in Malaysia from the 2021 baseline, saving more than 1,680,000 GJ of energy through identified reduction opportunities. To put this into perspective, that’s enough energy to power approximately 178,000 Malaysian homes for an entire year [based on average electricity consumption of about 2620 kWh per household annually].
Encouraged by these achievements, MPM expanded this initiative in 2024, driving the replication of this solution with three other operators across key fields - namely Gumusut-Kakap and Kikeh in Sabah operated by Shell and PTTEP respectively, and PM3CAA in the overlapping zone between Malaysia and Vietnam, operated by Hibiscus Oil & Gas Limited (HML). The aim was to assist PACs in performing Energy Landscape Assessments to uncover Energy Intensity (EI) reduction opportunities that will reduce GHG emissions and result in fuel savings. This broader deployment identified potential reduction opportunities in EI by 15% across three facilities from its 2024 baseline. This translates to an estimated 3,500,000 GJ in energy savings, sufficient to supply power to nearly 370,000 Malaysian households for an entire year.
Collaborating to Achieve a Common Goal
The adoption of the SETPACE tool marks an important step in decarbonising combustion as well as enhancing energy efficiency. The dedication of PACs in embracing this innovative solution reflects a collective drive toward achieving sustainability within Malaysia’s Upstream sector.
Building on the achievements at PETRONAS Carigali operated sites and the reduction opportunities identified with three other Production Sharing Contract (PSC) operators, MPM will continue to champion the widespread implementation of SETPACE. As the industry’s regulator, shaper and accelerator, MPM is committed to driving impactful transformation across all PACs in Malaysia Upstream.
The continued growth of Malaysia’s Upstream sector will hinge on the combined efforts of all stakeholders to reduce emissions, improve operational efficiency and prioritise sustainability. Achieving this requires strong collaboration and shared responsibility across the industry. Together, we can forge a resilient, cost-effective, and lower carbon future for Malaysia and beyond.
