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PETRONAS

Upstream
CONTENTS

ABOUT PETRONAS 2
FULLY INTEGRATED VALUE CHAIN 4
GLOBAL PRESENCE 6
DOMESTIC PRESENCE 8
INVESTMENT & PARTNERSHIP OPPORTUNITIES 10
EXPLORATION 12
DEVELOPMENT 16
PRODUCTION 18
UNCONVENTIONAL 22
LIQUEFIED NATURAL GAS 24
MAKING IT POSSIBLE 26
ADVANCING TECHNOLOGY & ENGINEERING 28
PEOPLE DEVELOPMENT 32
HEALTH, SAFETY & ENVIRONMENT 36
COMMUNITIES 38
CONTACT US 40

1
ABOUT
PETRONAS
Petroliam Nasional Berhad (PETRONAS) is Malaysia’s fully integrated oil and gas
multinational with proven capabilities in a broad spectrum of the petroleum value chain.
Building on the success of managing Malaysia’s oil and gas field resources, PETRONAS
has grown into a major global oil and gas company.

PETRONAS strives to contribute to the wellbeing of the people and nations wherever
it operates by developing and adding value to oil and gas resources in a manner that
carefully balances commercial, environmental and social considerations.

Fortune
Global 500 ®

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FULLY INTEGRATED VALUE CHAIN
Full Upstream and Downstream Capabilities

UPSTREAM DOWNSTREAM
“ Our capabilities spread across a broad
portfolio, across every stage of the oil
and gas development and across the
Natural Gas Crude Oil
Petroleum Products
Transportation Sector-
Diesel, Gasoline, Jet Fuel
and Lubricants
total value chain ”
Exploration,
Development and
Production
Refining Dato’ Wee Yiaw Hin
Executive Vice President & Chief Executive Officer,
Platform
Upstream, PETRONAS
Petrochemical Plant
Industrial Sector -
Ethylene, Methanol, MTBE,
Polyethylene, Propylene,
Urea and VCM
As one of the world’s leading oil and gas producers, our This extensive experience which spans the entire
global operations include exploration, development and value chain of the oil and gas industry has allowed
production of crude oil and natural gas in Malaysia and us to work alongside various host governments to
Liquefied Petroleum abroad; liquefaction, sale and transportation of LNG; develop their respective national Gas Masterplans,
Gas (LPG)
Residential and processing and transmission of natural gas and the sale of replicating the success we have in Malaysia to many
Liquefaction Processing Commercial Sectors
natural gas products; refining and marketing of petroleum countries abroad.
products; manufacture and sale of petrochemical
products; trading of crude oil, petroleum products and Consistently, we have demonstrated that we are
petrochemical products; and shipping and logistics good partners with host governments and other oil
relating to LNG, crude oil and petroleum products. companies in monetising oil and gas resources.
Processed Gas/
Peninsular Gas
Utilisation (PGU) System
Liquefied Natural Gas (LNG) Power Sector
Regasification Industrial Sector
Terminal
Export Sector

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Canada
Ireland

Azerbaijan
Turkmenistan
China
Iraq
Algeria
Egypt
Myanmar
Mauritania
Chad Sudan
Vietnam

South Sudan Thailand*


Suriname Cameroon Malaysia Brunei
Gabon
Indonesia

Angola

Australia
Mozambique

*Malaysia-
Argentina
Thailand Joint
Development Area

2014 Achievements: Global Business Dimensions:


• Overall Resource Replenishment Ratio (ORRR) of 3.1x • 91 partners
GLOBAL PRESENCE • 2,226 kboed of total E&P production • Over 15,000 employees
Proven Upstream Capabilities • 19 first oil and gas production • More than 80 development projects
• 2,073 mmboe of reserve addition • 130 rigs onshore and offshore
• 3,382 mmboe of resource addition • 23 FPSO / FSO
PETRONAS Upstream is a fully integrated business across the oil and gas value chain, • Total Capital Expenditure (CAPEX) of USD 16.3 billion with • 6 major LNG projects
Presence in more than
with full ownership and accountability of exploring, developing, producing and exploration expenditure of USD 1.6 billion • 4 unconventional assets
monetising oil and gas resources both domestically and internationally.
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On the global front, we are a renowned operator – known for our resilience and countries
distinctive capabilities in the upstream sector.
Our Experience in Resource Playtypes:
• Basement oil • Onshore • High CO2 Gas
PETRONAS’ Upstream capabilities and track record of successful onshore and offshore
• Heavy oil • Deepwater • Shale gas
developments in the oil and gas industry have earned us reputable operatorship in many
• EOR • HPHT • Coal Bed Methane
ventures across the world.
• Tight gas

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This map
representing
oil and gas
activities in
Malaysia is
for illustrative (BT'JFMET 0JM'JFMET
purposes only.

DOMESTIC PRESENCE 9,787


pipeline
km 23.2 bboe
discovered resources
Our Dual Role

Resource Owner / Host Authority and Operator Malaysia Business Dimensions and 2014
Achievements:
As a resource owner and host authority in Malaysia, we are responsible for the effective • 101 PACs and 6 RSCs
management and sustainable development of the country’s oil and gas resource base. • 90 producing oil fields
• 66 producing gas fields
As an operator, we aim to maximise upstream value, sustain production and enhance • 603 kboed liquid production
prospectivity of the nation’s acreages. • 6,331 mmscfd natural gas production
• 18 discoveries in Malaysia
• 355 platforms
Representation of upstream facilities in Sarawak. This schematic map is
• 43 rigs for illustration purposes only and is not drawn to scale.

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INVESTMENT &
PARTNERSHIP OPPORTUNITIES
Growth Opportunities for the Future, Together

Since our inception, we have attracted In an effort to continuously attract


large foreign investments into Malaysia, investments, we form various
and built strategic partnerships with partnerships through innovative
leading oil and gas contractors in Malaysia Production Sharing Contracts (PSC) and
and internationally. Risk Service Contracts.

In Malaysia, we have been successfully Through PSCs, our partners bear


developing the nation’s oil and gas all exploration, development, and
resources for four decades. Despite production costs in return for an agreed
maturing basins and fields, we have share of production. A variety of PSC
enhanced production, whilst increasing terms are designed to encourage an
the prospectivity of Malaysian acreages optimal level of investment based on the
through various de-risking efforts. complexity of petroleum resources.

Indicative of abundant upstream Malaysia presents a host of investment


opportunities, the number of oil and gas opportunities as it offers a strategic
fields under exploration, development, location, modern infrastructure, reliable
and in production in the country has also transport networks, political and fiscal
risen over the years. stability, among others.

101 PSCs 6 RSCs 355 Platforms

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EXPLORATION
Maximising Resources for Growth

We are exploring 35 basins in over 18 countries worldwide, across various operating


environments including shallow water, deepwater, deserts, swamps and sparsely
inhabited areas.

On the domestic front, the deep basin knowledge gathered over the years, coupled
with innovative technology applications have made Malaysia a top country in the region
in terms of exploration success.

These include opportunities in new basins and countries which provide materiality,
through the application of new technologies.

• World’s first 3D Broadband Circular Shooting Survey


• World’s first 3D Constant Gradient Slant Streamer Survey
• Joint development of the first High Power Shallow Water surface towed CSEM source
• First Airborne Full Tensor Gradiometry Survey
• 3D Full Wave Seismic for imaging through gas cloud
• Imaging solution with 3D Finite Difference Modelling

In the international arena, we continue to high-grade the quality of our exploration


assets. In countries that we are already producing, we focus on organic and value
growth through both near fields and new plays exploration.

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SEA’s SEA’s SEA’s
Highest Highest Lowest 21
Discoveries in 2014
Resource Addition (RA) across Exploration Success Rate of 46% Unit Find Cost (UFC) in SEA 18 Malaysian discoveries
SEA region as Malaysia achieved in Malaysia compared to other region with Malaysia’s UFC 3 International discoveries
RA of 5.0 BBOE countries in SEA region stand at USD0.94/MMboe

*SEA - Southeast Asia

• HPHT vertical wells in Malaysia - 4,830 metres depth with • HPHT exploration – Egypt, Malaysia, Turkmenistan
12 gas bearing reservoirs • Tight gas – Oman
• Basement oil play – Vietnam, Malaysia • Carbonates exploration – Malaysia, Indonesia
• Deepwater exploration – Mozambique, Egypt, Cuba, • Precarbonates – Malaysia
Mauritania, Brunei, Malaysia

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DEVELOPMENT
Delivering Excellence

Superior Project Management


PETRONAS Upstream’s Project Management System is a structured approach, ensuring
project delivery is safe, cost effective and competitive. Regardless of project complexities,
we comply with stringent Health, Safety and Environment (HSE) standards, PETRONAS
Technical Standards (PTS) and global best practices.

Innovative Project Delivery


PETRONAS Upstream employs innovative workflows and processes for effective
development design and planning. These efforts have earned us significant cost
savings and enabled projects to be delivered ahead of time, while providing a greater
return on investment.

World World’s heaviest SEA’s


record
Sepat oil Phase 1 achieved
External turret – Floating
Production Storage
Offloading (FPSO)
Platform construction
at Gumusut Kakap,
Sabah, Malaysia
First
Large Scale Enhanced
1st hydrocarbon within 12 First Deepwater field (2012) Oil Recovery (EOR)
months. Substantially faster employing the first Truss Project – Startup of Tapis
than industry average of 28 Spar Floating Production EOR project offshore
months. IPA Benchmark Unit outside the Gulf of Terengganu, Malaysia
(2012) Mexico (2012) (2014)

*SEA - Southeast Asia

• World’s first use of composite bridge plug system for production testing purposes in Kuang North field, Malaysia
• Borneo’s longest: Sabah-Sarawak Gas Pipeline (SSGP) of more than 500 km to transport offshore natural gas to
processing terminals
• Kanowit: Malaysia’s first subsea well with a potential of producing 100 mmscfd from each well

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PRODUCTION
Optimising Growth

Converting Maturing Brownfields


PETRONAS Upstream has implemented various brownfield rejuvenation
efforts, effectively extending the production life of oil and gas fields with
Enhanced Oil Recovery (EOR), Improved Oil Recovery (IOR), Improved
Gas Recovery (IGR) and Infill Drilling technologies.

Through innovative strategic alliances with international contractors,


we have repeatedly improved a reservoir’s recovery factor and asset
integrity, whilst arresting declining production in domestic and
international fields.

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EOR | IOR | IGR
First oil and gas production Equipment Excellence
in 2014 from Malaysia and (OEE) of platform production enhancement
international operations performance in Malaysia projects underway in
for Oil 91% and Gas 92% Malaysia
in 2014

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Enhancing Yields with Innovative Technologies
New developments in deepwater exploration and production, Carbon Dioxide (CO2)
management technologies and High Pressure High Temperature (HPHT) technologies
have opened up new opportunities for growth and monetisation.

Upstream Total Production


in ‘000 boe per day

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The outlook for PETRONAS production is


a healthy level growth over a period of ten
years.

• Turkmenistan – fully operational to support future gas • Higher yields: 440 mmscfd of raw high CO2 gas at Tangga
production increase at the capacity of 500 mmscfd Barat cluster fields, first application of membrane type
• Mauritania Chinguetti field – one of the producing assets CO2 removal technology
in Mauritania with a reserve volume of 11,652 kbbl

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UNCONVENTIONAL
Venturing Into New Frontiers

PETRONAS is accelerating upstream In 2012, Progress Energy Canada Ltd


growth by venturing into new frontiers (PECL) was acquired by PETRONAS,
with unconventional gas through bringing in a portfolio of unconventional
strategic acquisitions and partnerships assets in Alberta and British Columbia
with leading oil and gas operators. with over 200 tcf of gas in place.

A joint venture between PETRONAS, We are leveraging strategic partnerships


Santos, Total and Kogas in Australia and PETRONAS’ experience across the
allows us to develop one of the world’s integrated value chain to export and
first Coal Bed Methane (CBM) to LNG monetise this gas through the Pacific
projects, integrating onshore gas field Northwest LNG project.
development, a 420-kilometre gas
transmission pipeline and an LNG
processing plant on Curtis Island, near
Gladstone.

Coal bed
methane 2.1
GLNG 420 km 200 tcf million acres
PETRONAS embarks on one of the of underground gas gas in place at acres of land
world’s first CBM to LNG projects transmission pipeline Montney Shale, position
with 7.8 MTPA (onstream target 2015) from project site to the Canada
at Queensland, Australia liquefaction facility

Australia
Canada

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LIQUEFIED NATURAL GAS
Optimising Gas Monetisation

As one of the largest exporters of liquefied natural gas (LNG) in the world, PETRONAS
remains at the forefront of the global LNG supply, poised to meet growing energy demand
from both the Pacific and Atlantic Basins. We have been a reliable supplier for over thirty
years, supplying our long-term buyers and meeting emerging demands across the world.

Our capabilities extend across the whole gas value chain. With ventures into new playtypes
and unconventional gas, game-changing technology to unlock small and marginal gas
field reserves, LNG facilities in strategic locations and established relationships with trading
supply points across the globe, we are well-positioned to deliver our LNG commitments.

By tapping into the cost efficiencies from this unique position, we are able to offer the best
value to our buyers globally.

Pioneering World
Technology Class Overall Equipment
Commercial Floating LNG
facilities Effectiveness (OEE) at PLC

PFLNG 1
1.2 mtpa capacity
(targeted commissioning in 2016)
More than
PFLNG 2
400BCe
delivered annually from the
1.3 mtpa capacity PETRONAS LNG Complex (PLC)
(targeted commissioning in 2018) in Bintulu

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PETRONAS’
facilities &
hydrocarbon plays

Shallow water Deepwater Ultra-Deepwater

Coal Bed Conventional


Methane associated
gas

Conventional
non-associated gas
Tight Oil
Sandstone sand gas

Gas-rich shale

for illustration purposes only

Today, we are amongst the world’s first in maximising recovery of discovered fields with

MAKING IT POSSIBLE Enhanced Oil Recovery (EOR) efforts.

PETRONAS Upstream’s Strength and Capabilities Advanced technologies are applied alongside new strategies to rejuvenate brownfields,
extracting maximum value from existing reservoirs.

We have explored some of the world’s most challenging terrains to secure new reserves.
As part of delivering some of the world’s first, we have consistently brought oil and gas
Additionally, we conduct deepwater exploration, entering also into highly complex HPHT
onstream ahead of schedule – providing higher return on investment for our partners,
reservoirs and wells with high CO2 content to enhance our yields.
stakeholders and investors.

Our growth portfolio includes unconventional oil and gas - which include shale gas and
Our Experience in Resource Playtypes
Coal Bed Methane.
• Basement oil • Onshore • High CO2 Gas
• Heavy oil • Deepwater • Shale gas
• EOR • HPHT • Coal Bed Methane
• Tight gas

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ADVANCING TECHNOLOGY
& ENGINEERING
Development and Deployment of Technologies

Excellence in Project Delivery for Upstream


PETRONAS Technical Global is the centre for technical expertise and solutions, focused
on finding unique and innovative answers to the challenges of project management and
delivery in Upstream. Through its continuous efforts in refining and complementing our
technical expertise with new and innovative techniques, Technical Global provides the
Upstream business in PETRONAS with the capability to deliver greater value with speed,
efficiency and safety.

Technology On the Cutting Edge


PETRONAS has done groundbreaking work in technology, positioning ourselves as
a leader in oil and gas technology as we race to develop effective solutions for the
industry’s operational needs. Through two centres of excellence, Technical Global and
Technology and Engineering Division, we address the challenges of ageing facilities,
maturing fields, high CO2 gas fields and hydrocarbon impurities such as mercury, acid
and sulphur through our patented technologies, developed through innovation and
strategic partnerships in research and development.

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PETRONAS’ Patented Technologies *

ProAssure™ Clamp SolidClenz™


• A composite overwrap repair system for corrosion protection • A unique chemical formulation to remove organic and inorganic
and strengthening. solid deposits in production well tubings, well bores, heat exchangers
• Superior adhesion and mechanical properties that works in and pipelines for improved Return On Investment (ROI) on chemical
dry wet or subsea environments. treatment.
• Two-time finalist in 2014’s IChemE International Awards and Annual
• Can be used for both onshore and offshore pipeline repairs.
World Oil Awards, in the Core Chemical Engineering and Best
• ProAssure™ Wrap Extreme clinched the JEC Composites Production Chemical category.
Innovation Award and was a finalist under Minerals & Energy
category in the Australian Innovation Challenge 2013.

HycaPure™ Hg
• A proprietary ionic liquid mercury removal technology that removes
mercury in its elemental, inorganic and organic forms which are
SmartCen™ present in natural gas feeds.
• An online real-time metering supervisory system designed for all
metering operations which support centralised data for remote • IChemE Niklin Medal for Best Overall Entry, with 3 consecutive wins
monitoring, diagnostics and troubleshooting of metering systems. in the Global IChemE Awards 2013 in the categories of Chemical
Engineering Project of the Year, Sustainable Technology and
• Won the Special Meritorious Awards for Engineering Innovation Outstanding Achievement in Chemical & Process Engineering.
(MEA) 2015 I nthe Intelligent Systems and Components category.
• Sustainable Technology Award – IChemE Malaysia Awards 2013.

• Teamwork in Innovation Award – Royal Society of Chemists UK.

*Note: Featured are some of our Upstream deployed technologies and


engineering solutions with significant value creation as of 2015.

4 Up to JEC Europe Up to
international and
local awards
HycaPure™ Hg
40%
reduction in CAPEX for
Innovation
Award
2014 -
50%
footprint and weight
Innovation in development of high ProAssure™ reduction with Sep-iSYS’
contaminants CO2 content gas fields Clamp separation system
removal technology

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PEOPLE DEVELOPMENT
Ensuring a Sustainable and Skilled Talent Stream

People are the driving force of our business. For every hour we put out in the field,
we spend hundreds more in training and development. We provide structured
capability development programmes to upskill our diverse talent stream across
geographical boundaries.

Advancing Technical Capabilities


We have developed strong partnerships with our learning partners which include
Institut Teknologi Petroleum PETRONAS (INSTEP), PETRONAS Leadership Centre (PLC),
Universiti Teknologi PETRONAS (UTP) and Malaysian Maritime Academy (ALAM) to
advance our technical capabilities.

PETRONAS is the only national oil company in Asia to offer live simulation
training facilities as part of its capability development programme for technicians
and operators. At the integrated Oil and Gas training centre, hosted at INSTEP,
a simulation drilling rig will be used for programmes conducted by the
UMW-INSTEP Drilling Academy (UIDA). The facility also hosts live upstream and
downstream training plants to complement INSTEP’s flagship programme, the
Petroleum Technology Programme (PTP).

Through our collaborations with service companies, contractors and joint venture
partners, we provide on-the-job training programmes to heighten our employees’
skills and expertise for superior performance and delivery.

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UPSTREAM’S CAPABILITY DEVELOPMENT FRAMEWORK

BUSINESS
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commercial

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competency across
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Upstream capabilities on

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Excellence (CoE)

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shale gas & oil field

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on LNG technology

PLO
development
specializing in gas treating

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& liquefaction for Global

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LNG portfolio

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with enhanced knowledge

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petroleum engineers with
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Develop and sustain E&P

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awareness on all surface to improve project

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HEALTH, SAFETY & ENVIRONMENT
Committed to HSE Excellence

Stringent HSE management practices, in line with international standards and best
practices, are applied at every level of our business activities to safeguard our people,
environment, assets and reputation. In doing so, we are focused on having the right
leadership, commitment, culture, mindset, systems and tools.

Major Loss of Marine Offshore


Primary Containment
for 3 Consecutive Years
Safety Taskforce
(MOST)
8.6 million
safe manhours without LTI:
2012 - 2014
HSE Innovation Award Turkmenistan

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COMMUNITIES
Socio-Economic Development

Communities and Capability Building


We actively undertake community projects in countries where we operate, adding value
to the local skills and capabilities of the people towards long-term sustainable growth.

We work closely with local governments to provide basic needs such as safe drinking
water, shelter and healthcare.

Additionally, we embark on social, environment, education and community projects.

• MALAYSIA: • Micro-Hydro Long Kerangan, Project Mekar Winner! CMO Asia Awards, CSR Best Practices,
Community Development Category • Maximized Local Content through pipeline Right of Way Operations &
Maintenance contracts, and hiring of catering and accommodation services • Participation of more than 200
students in the high achievers programme from various secondary schools in Sabah • More than 90 graduates
from the Kimanis Training Centre in Sabah

• SOUTH SUDAN: Facilities improvement and • IRAQ: Established the Garraf Vocational Training Centre to
expansion for the Atlabara East Primary School provide locals with the opportunity for skills development
Winner! Best Corporate Social Responsibility Award (CSR)
• INDONESIA: Entrepreneurship training for high Initiative at the Abu Dhabi International Petroleum Exhibition
school students in one of our areas of operation and Conference (ADIPEC) 2014

• MYANMAR: Upgraded the government technical


high school in Kanbauk for youths aged 14 to 16

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For further information, please contact:

Corporate Affairs & Administration


PETRONAS Upstream
Level 24, Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Center, 50088 Kuala Lumpur, Malaysia
Tel: +603 2051 5000 Fax: +603 2026 5050
www.petronas.com

Please visit our Corporate Website for more information on our


other businesses and related subsidiaries.

Glossary of Terms
boe – barrels of oil equivalent
E&P - Exploration & Production
CSEM – Control Source Electro-Magnetic
EOR – Enhanced Oil Recovery
FDP – Field Development Plan
FPSO – Floating Production Storage Offloading
FSO – Floating Storage Offloading
kbbl – thousand barrels of oil
kboed – thousand barrels of oil equivalent per day
km – kilometres
LTI – Loss Time Injury
mmboe – million barrels of oil equivalent
mmboed – million barrels of oil equivalent per day
mmscf – million standard cubic feet
mmscfd – million standard cubic feet per day
mmstb – million stock tank barrels
MTPA – Million Tonne Per Annum
OEE – Overall Equipment Excellence
ORRR – Overall Resource Replenishment Ratio
tscf – trillion standard cubic feet

©2015 PETROLIAM NASIONAL BERHAD (PETRONAS)


All rights reserved. PETRONAS makes no representation or warranty, whether expressed or implied, as to the accuracy or completeness of the facts presented.
PETRONAS disclaims responsibility from any liability arising out of reliance on the contents of this publication. All data represented are as at end December 2014.

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