Economy Minister Rafizi Ramli.
KUALA LUMPUR: The narrative of many that say the days of oil and gas (O&G) are numbered is not true, says Economy Minister Rafizi Ramli.
He said whenever speaking about the energy transition, these questions always arise but the reality is, in 2050, the global energy mix will still contain fossil fuels.
“We’ve maintained that it is not about phasing out O&G. It is about phasing down our reliance on fossil fuels.
“And at the same time, building our capacity for renewables to offset concerns about greater energy demand,” he said in his speech during Oil and Gas Asia 2024 (OGA 2024) here yesterday.
According to Rafizi, demand for global gas is expected to grow beyond 2030, whereby a larger part of the demand will come from within Asia.
He said Malaysia’s own energy mix will see natural gas grow from 43% to 56% between 2023 and 2050.
“In fact, most of my discussions with Petroliam Nasional Bhd (PETRONAS) is about how we ensure that we can achieve this sustainably.
“Because as we push forward for the next agenda in our economic transformation, and that ultimately revolves around artificial intelligence, chips and semiconductors, we can’t run away from the truth that there will be increased demand for power,” he said.
He added this made natural gas a core linchpin for the energy transition.
“From the perspective of my ministry, we actually see a very strategic fit between a sustainable O&G industry and a robust energy transition roadmap for the country, most importantly because the players are more or less the same,” he said.
Another key step Malaysia will be taking will be in the carbon capture, utilisation and storage (CCUS) segment.
Rafizi said in November this year, his ministry will be tabling a regulatory framework that is benchmarked against international standards.
“We’ve been talking about CCUS for a while, and I think it is time for Malaysia to leapfrog and position ourselves as a CCUS leader not just in this region but globally,” he said.
Rafizi added he hopes the act that will be tabled and passed in two months will speed up all components of the industry to come together to position Malaysia as a regional and global leader in CCUS.
“At the same time, as part of our ambition to become a regional and global CCUS hub, we are pursuing and will sign a series of memoranda of understanding with several countries to enable international transportation of capital.
“I think the industry is ready, that’s one component of it,” he noted.
He said Malaysia had a good chance of shaping the global supply chain of CCUS much in the same way that the forefathers of the O&G industry in Malaysia had built the global supply chain for liquefied natural gas decades ago.
While CCUS is only one of the six energy transition levers under the National Energy Transition Roadmap (NETR) launched last year, the segment is expected to create over 200,000 jobs and about RM250bil in gross value for the next 30 years.
“The flagship projects alone at the NETR are expected to bring in over RM25bil in investments across each of these six levers.
“And to realise our ambition of being a renewable energy hub requires about RM1.3 trillion financing by 2050.
“We are hoping that the government will be able to provide incentives for core and blended financing to expedite investments into energy transitions, including CCUS,” he said.
However, Rafizi acknowledged that it is mainly through private capital mobilisation that renewable energy targets will be achieved quicker.
He said companies attending the OGA 2024 had the resources to push ahead and invest into the future of energy, ensuring that the energy ecosystem is resilient and sustainable.
Rafizi said securing a robust economy means securing the future of the power and energy sector.
“O&G has been at the centre of national development for decades.
“That has enabled countries to leapfrog in infrastructure and establish sovereign wealth funds for future generations. We’ve seen it in other countries and obviously in Malaysia too,” he said.
He said the pathway to remaining at that centre lies in deleveraging short-term bets on oil, shoring up natural gas and embracing renewables for long-term gains, which is more or less the 30-year horizon in which his ministry has taken.
“As energy sources compete against each other, the trade-off in reduced consumption of fossil fuels is offset by an increased consumption of renewables.
“So I hope and am praying that the O&G players will continue to be the centre of national development and through it, we will work with the industry to secure the welfare of our future generations.”
Meanwhile, this year’s OGA 2024 will be the 20th edition so far, and will expect 25,000 visitors from 70 countries.
Organised by Informa Markets, the event themed “Powering Progress Towards a Sustainable Energy Landscape” will feature 2,000 national and international exhibitors with seven pavilions from Germany, South Korea, Singapore, the United Kingdom, China, Italy and India.
After its success during the first round in 2022, the second Petrochemicals Sustainability Conference by the Malaysian Petrochemicals Association will also be held to drive sustainability discussions in the petrochemical sector.
