KUALA LUMPUR: The global oil and gas' upstream sector has seen significant cuts in capital expenditure (capex) with spending below about US$400 billion in 2020.
This was less than half than the peak in 2014, Petroliam Nasional Bhd (Petronas) executive vice president and chief executive officer (upstream) Adif Zulkifli said.
"Companies had to make important decisions to remain resilient by keeping costs low and margins intact. Projects were put on hold, asset equipment impairments saw an upswing and job cuts were widespread within the industry," he said in a keynote address at the inaugural virtual Re-Imagining Malaysia Assets (Reset) 2021 Conference here today.
Adib said the industry had accelerated its pace of energy transition with an increased focus on clean and sustainable sources of energy due to concerns about climate change.
"Malaysia's National Energy Policy is expected to be launched in the second half of 2021 has also been announced to consider the transition to a low carbon future," he added.
However, Adif said oil and gas would continue to make up a significant portion of the energy mix although on a declining trend from about 54 per cent in 2018 to around 47 per cent by 2040 due to the growth of renewables.
Petronas Carigali Sdn Bhd chief executive officer and vice president (Malaysia Asset), Bacho Pilong said several global oil companies including Petronas had set zero-carbon emission goal by 2050 for a more sustainable future.
"The energy transition is just as challenging, leaving the company with no choice but to step up for the right solution that pays to enhance revenue, keep the cost down and keep everyone safe," he added.