Overview & Opportunities

• Sabah is a major contributor to Malaysia’s energy sector, accounting for nearly 40% of the nation’s oil and 20% of its gas production. The Star Sabahoilandgas

• New opportunities are emerging through Petronas’ Malaysia Bid Round 2025, which includes exploration blocks in Sabah’s offshore Sandakan Basin, along with shallow-water resource opportunities tied to existing infrastructure Reuters.

• Shell’s Gumusut-Kakap-Geronggong-Jagus East (GKGJE) deepwater project has initiated Phase 4 production—adding approximately 21,000 barrels of oil equivalent per day and reinforcing Sabah’s role in future oil supply Reuters.​

 

Achievements & Strategic State Initiatives

• SMJ Energy Sdn Bhd, under the Commercial Collaboration Agreement (CCA) with Petronas, has acquired stakes in the Samarang PSC, PCF Sabah, and upstream blocks — helping Sabah gain greater revenue, participation, and strategic voice in the oil and gas value chain. SMJ Energy Sdn Bhd     sabahoilandgas      Daily Express Malaysia    The Star.

• Under SMJE’s stewardship, local OGSE (Oil & Gas Services & Equipment) activity surged from RM341 million to over RM2 billion, while the number of local OGSE contractors jumped from 263 to 475. Sabahoilandgas The Star.

• Petronas and Sabah Government honored 88 local Sabah vendors, up from 10 in 2022, and awarded OGSE contracts — supported by financing access totaling over RM120 million via the Vendor Financing Programme PETRONAS Global.

• The Sabah Local Content Council (SLCC) was established in 2024 to enforce local participation targets—aiming for 80% Sabahan workforce and 30% local contract awards in the oil and gas sector sabahoilandgas.

 

Forward-Looking Development

• Under its gas masterplan, Sabah’s SOGDC and Gibson Shipbrokers are studying development of facilities at Sipitang O&G Industrial Park—including jetties, hydrocarbon storage, a floating power plant, and potential LNG bunkering—which underpin Sabah’s downstream vision Reuters.

• Petronas and Sabah Energy Corporation (SEC) signed a major gas supply agreement: 370 MMscfd of supply now supports industrial users, including green steel production by Esteel—further bolstering energy security and industrial capability PETRONAS Global.

• A five-year agreement is in place for Petronas to supply Sabah Electricity with 16 MMscfd of natural gas to support sustainable power generation in Sabah and Labuan Reuters.

 

Development & Infrastructure Support

• Sabah Oil & Gas Terminal (SOGT) in Kimanis processes up to 300,000 barrels daily and 1 billion cubic feet of gas per day, serving as a critical onshore hub tied to Sabah's energy output Wikipedia.

• The Sabah–Sarawak Gas Pipeline (SSGP) has served since 2014, though sections are slated for decommissioning by 2027 due to challenges such as soil instability Wikipedia.

 

Challenges & Responses

• Infrastructure constraints, including power supply and rural electrification, remain key challenges. Sabah’s SE-RAMP 2040 roadmap, driven by the Energy Commission of Sabah (ECoS), targets 100% clean electrification by 2040 and full rural access by 2030 Malaysiakini.

• OGSE companies still face limitations in technical expertise, financial capacity, and commercial scale—prompting mentorship, capability-building, and ecosystem partnerships facilitated by industry groups like SOGSC and PKPBS Sabah Okay   sabahoilandgas.

​

In Summary

Sabah’s oil, gas & energy sector stands at a transformational juncture—powered by robust natural resources, and reinforced by strategic state participation through SMJ Energy, SEC, SOGDC, and partnerships with Petronas. Progress is evident in local vendor inclusion, infrastructure development, and green industrial investments—yet challenges remain in infrastructure, electrification, and ecosystem readiness.

​

Future outlook includes expansion into downstream infrastructure, clean energy supply, electrification drives, and digital transformation. These create fertile ground for businesses, investors, and policymakers to engage with Sabah’s energy evolution.