Sarawak Restarts Onshore Oil Production After 50 Years

Sarawak has officially restarted onshore oil production for the first time in over five decades, with the state-owned company Petros launching operations at the AKW field near Marudi. This development, announced by Sarawak Premier Abang Johari Openg, comes as a part of the state’s strategy to enhance its oil and gas sector and create more value-added economic opportunities.

According to reports from Free Malaysia Today, the AKW field has an initial production capacity of 800 barrels per day, equating to approximately 24,000 barrels monthly. This production milestone is seen as a major step towards Sarawak's ambitions to develop its downstream industries, particularly in ammonia and blue hydrogen production, which are key priorities for the state's economic future.

“Abang Johari said the commencement of oil production was a significant milestone for Sarawak, positioning the state as a major player in the oil and gas industry.”Abang Johari Openg, Premier of Sarawak

Abang Johari emphasized the importance of this development during a Sarawak Day celebration, framing it as a significant gift to the people of Sarawak. He noted that the new approach to resource management aims to ensure that Sarawak’s natural resources are processed and developed within the state, thereby benefiting local communities directly. He stated that in the past, natural resources were exported in raw form, while value-added activities, job opportunities, and technology development took place elsewhere, highlighting the shift in policy.

“He expressed the desire for every resource owned by Sarawak to be processed, developed, and given added value within the state so that its wealth can directly benefit the people.”Abang Johari Openg, Premier of Sarawak

The restart of onshore oil production follows the award of an onshore petroleum contract to Petros in 2021, with drilling operations beginning in October 2023 at Block SK433 in Miri. This strategic move is expected to create high-skilled jobs and open up new business opportunities in the region, aligning with the Sarawak government’s comprehensive development policy.

Industry analysts suggest that this initiative could position Sarawak as a more significant player in the oil and gas sector, particularly in the context of regional developments in the industry. For instance, InsideASEAN has reported on Brunei's recent moves to revitalize its oil and gas sector, indicating a broader trend of resource management and development across Southeast Asia.