By MOHD IZHAM BIN HASHIM
KOTA KINABALU: Sabah’s oil and gas sector is entering a new phase of offshore development, regional collaboration and stricter environmental standards, supported by billions of dollars in ongoing investment commitments aimed at sustaining long-term growth, according to Dato’ Wee Yiaw Hin, Senior Advisor at Green Esteel Pte Ltd.
Speaking at the recent Sabah Pacific Impact Investing for Sustainable Development Summit 2026, Wee challenged the notion that the petroleum industry has entered its twilight years, arguing that oil and gas will continue to play a vital role throughout the global energy transition.
“In our industry, we do not like to be called a ‘sunset’ industry,” Wee said, referring to a presentation slide featuring a sunrise.
“The image on my first slide is not a sunset; it is a sunrise. This represents a new dawn for our energy sector.”
Three-step strategy for growth
Framing Sabah’s petroleum industry as a three-step “staircase”, Wee outlined a long-term strategy centred on maximising existing production, accelerating new field developments and expanding exploration to sustain the state’s energy sector.
“Sabah contributes roughly 40% of Malaysia’s crude oil production, while natural gas output has increased from only a few hundred million standard cubic feet (SCF) per day a decade ago to more than 1,000 million SCF, or one billion cubic feet (BCF), daily,” he told participants at the Sabah Asia Pacific Impact Investing for Sustainable Development Summit 2026.
Maintaining this momentum, he said, requires continuous investment in production optimisation, reservoir remodelling, reducing operational downtime and deploying new technologies across producing assets.
Wee said existing deepwater developments, including Gumusut-Kakap, Kebabangan, Block H and Malikai, continue to attract billions of dollars in sustaining investments as operators work to maximise production and extend field life.
Alongside these efforts, Sabah is also seeing renewed momentum in greenfield developments.
“Today, they are going forward because we have unlocked them using innovative engineering, process developments, and cost-efficient technologies,” said Wee during the session on the topic how ‘Energy and water play a role in ecosystem development’.
He cited ongoing developments at the Mutiara gas field on Sabah’s East Coast, the Permata oil cluster and other greenfield projects, each involving investments estimated at around US$2 billion to US$3 billion.
Wee added that Petronas had recently announced development plans for the Megah and Limbayong deepwater fields, further strengthening Sabah’s upstream pipeline.
Looking further ahead, he said Petronas is investing about US$500 million annually in seismic surveys and exploration activities across shallow-water, deepwater and ultra-deepwater areas to replenish future reserves.
He added that last year’s discovery of the Megah field, estimated to contain between 200 million and 300 million barrels of oil, suggests Sabah may be entering another phase in its historical “creaming curve” of petroleum discoveries.
Expanding beyond borders
Wee also called for greater regional collaboration to unlock future offshore resources.
Pointing to Malaysia’s long-standing joint development arrangements in overlapping maritime areas with Thailand and Vietnam, he suggested similar cooperative frameworks could eventually be explored with neighbouring Indonesia and the Philippines.
“We should explore similar collaborative, cross-border frameworks with our neighbours, Indonesia and the Philippines, to unlock shared resources in the region,” he said.
Domestically, Wee said strengthening Sabah’s oil and gas ecosystem would require greater financial support for local service providers and emerging companies.
He noted that while major multinational operators generally have access to capital, many smaller local firms and start-ups continue to face financing constraints despite playing an increasingly important role in the industry.
As second- and third-tier energy companies increasingly undertake greenfield developments requiring investments of between US$200 million and US$300 million, Wee said the industry would require more innovative financing mechanisms beyond conventional banking facilities.
Environmental responsibility
Despite advocating continued oil and gas development, Wee stressed that environmental stewardship must remain central to the industry’s future.
“The reality is that as long as we cannot entirely transition away from fossil fuels, we must continue to produce oil and gas responsibly to fuel and support our economy,” he said.
He said operators are progressively replacing older methane venting systems with controlled flaring, where technically feasible, because methane has a significantly greater warming impact than carbon dioxide. New greenfield developments, he added, are being designed to achieve zero routine flaring and zero venting.
Wee also highlighted increasingly stringent standards governing offshore produced water, saying additional investment would be needed to deploy advanced filtration and treatment technologies to meet tighter environmental discharge requirements.
Concluding his presentation, Wee said navigating uncertainty in global energy markets requires disciplined long-term planning rather than attempting to predict short-term price movements.
“You don’t need a crystal ball to navigate this industry,” he said. “You just need a box, —a structured framework.”
He said companies should adopt structured planning frameworks, stress-test projects under different price scenarios and remain committed to balancing energy security with environmental responsibility.
Wee during his presentation at event.
