PETRONASExploration & Production

www.petronas.com

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ABOUT PETRONAS

INTEGRATED VALUE CHAIN

PETRONAS E&P (EP) GLOBAL PRESENCE

PETRONAS EP MALAYSIA OPERATIONS

INVESTMENT & PARTNERSHIP OPPORTUNITIES

EXPLORATION

DEVELOPMENT

PRODUCTION

UNCONVENTIONAL

MAKING IT POSSIBLE

ADVANCING TECHNOLOGY & ENGINEERING

PEOPLE DEVELOPMENT

HEALTH, SAFETY & ENVIRONMENT

COMMUNITIES

CONTACT US

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CONTENTS

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Petroliam Nasional Berhad 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 well-being 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.

FortuneGlobal 500®

ABOUTPETRONAS

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PETRONAS ANNUAL REPORT PE 20112

A

B C D

E

Crude Oil

 Natural Gas

Liquefied Natural Gas (LNG)

LiquefactionProcessingRefining

Exploration,Development andProduction

J RegasificationTerminal• Export Sector

I Processed Gas/Peninsular GasUtilisation (PGU)System • Power Sector• Industrial Sector

G Petrochemical Plant• Industrial Sector -

Ethylene, Methanol, MTBE, Polyethylene, Propylene and Urea

F Petroleum Products• Transportation

Sector - Diesel, Gasoline, Jet Fuel and Lubricants

H Liquefied PetroleumGas (LPG)• Residential and Commercial Sectors

H

Fully Integrated Value Chain for the Oil and Gas Industry

As one of the world’s leading oil and gas producers, our global operations include exploration, development and production of crude oil and natural gas in Malaysia and abroad; liquefaction, sale and transportation of LNG; processing and transmission of natural gas and the sale of natural gas products; refining and marketing of petroleum products; manufacture and sale of petrochemical products; trading of crude oil, petroleum products and petrochemical products; and shipping and logistics relating to LNG, crude oil and petroleum products.

This deep experience which spans the entire value chain of the oil and gas industry has allowed us to work alongside various host governments to develop their national Gas Masterplan, replicating the success we have in Malaysia, to many countries abroad.

Consistently, we have demonstrated that we are good partners with host governments and other oil companies in monetising oil and gas resources.

“ Our capabilities spread across a broad portfolio, across every stage of the oil and gas development and across the total value chain ”

Dato’ Wee Yiaw HinExecutive Vice President

Exploration & Production, PETRONAS

INTEGRATED VALUE CHAIN

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Vietnam

MalaysiaThailand*

Brunei

Indonesia

Myanmar

Australia

Egypt

Chad

South Sudan

Sudan

Oman

Iraq

Turkmenistan

Uzbekistan

Mozambique

Algeria

MauritaniaCuba

CameroonSierra LeoneVenezuela

Canada

ventures in23 countries

162

offshore platforms

332PETRONAS’ Exploration & Production (EP) business carries out exploration, development and production of oil and natural gas resources across five continents.  On the global front, we are a renowned exploration and production operator – known for our resilience and distinctive capabilities in the upstream sector.  PETRONAS EP’s capabilities and track record of successful onshore and offshore developments in the oil and gas industry have earned us reputable operatorship in many ventures across the world.

2012 Achievements:• Overall Resource Replenishment Ratio (ORRR) of 2.0x• 2,010 kboed of total E&P production• 32 first oil and gas production : 11 greenfields and 21 brownfields • 546 mmboe of reserves developed • 24 new discoveries• 2,077 mmboe of resource addition• Total Capital Expenditure (CAPEX) of USD9.1 billion with

exploration expenditure of USD1.8 billion

Global Business Dimensions:• 64 partners • 10,500 employees, over 50 nationalities• More than 50 development projects • 204 producing oil and gas fields• Over 300 drilled exploration and development wells • 67 rigs onshore and offshore• 19 FPSO / FSO

Our Experience in Resource Playtypes: • Heavy oil • Deepwater• Basement oil• Tight gas

• Onshore• HPHT• EOR

• High CO2 Gas

• Coal bed methane• Shale gas

PETRONAS EP

*Malaysia-Thailand Joint Development

Area

Global Presence

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Gas Fields Oil Fields

Dual Role: Resource Owner / Host Authority and Operator

As a resource owner and host authority in Malaysia, we are responsible for the effective management and sustainable development of the country’s oil and gas resource base.  As an operator, we aim to maximise upstream value, sustain production and enhance prospectivity of the nation’s acreages.

pipeline7787km

discovered resources22.2 bboe

Representation of upstream facilities in Sarawak. This schematic map is for illustration purposes only and is not drawn to scale.

Malaysia Business Dimensions and 2012 Achievements: • 95 PSCs and 4 RSCs• 77 producing oil fields• 55 producing gas fields• 586 kboed liquid production• 6,006 mmscfd natural gas production• 22 discoveries• 320 platforms• 27 rigs

PETRONAS EP

This map representing oil and gas activities in Malaysia is for illustrative purposes only

Malaysia Operations

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Since our inception, we have attracted large foreign investments into Malaysia, and built strategic partnerships with leading oil and gas contractors, domestically and internationally.

In Malaysia, we have been successfully developing the nation’s oil and gas resources for over three decades. Despite maturing basins and fields, we have enhanced production, whilst increasing the prospectivity of Malaysia acreages through various de-risking efforts.

Indicative of abundant upstream opportunities, the number of oil and gas fields under exploration, development, and in production in the country has also risen over the years.

In an effort to continuously attract investments, we form various partnerships through innovative Production Sharing Contracts (PSCs) and Risk Service Contracts (RSCs).

Through PSCs, our partners bear all exploration, development, and production costs in return for an agreed share of production. A variety of PSC terms are designed to encourage an optimal level of investment based on the complexity of petroleum resources.

RSCs were introduced in 2011 as a new solution to attract niche partners with the desired capability and technology to grow our resources. In RSCs, PETRONAS assumes the role of project owner whilst contractors are service providers with equity share in the RSC. Upfront capital investment by the contractors will be recovered upon production, together with a fixed fee for services rendered, based on their performance, relevant to the development execution and subsequent production.

Malaysia presents a host of investment opportunities as it offers a strategic location, modern infrastructure, reliable transport networks, political and fiscal stabilities, among others.

growth in number of PSCs in the last 8 years

100% 4 RSCs 95 PSCs320 platforms

INVESTMENT &PARTNERSHIP OPPORTUNITIESGrowth Opportunities For The Future, Together

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EXPLORATION

We are exploring 35 basins in over 18 countries worldwide, across various operating environments including shallow water, deepwater, deserts, swamps and lightly 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

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.

Maximising Resources For Growth

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• HPHT vertical wells in Malaysia - 4,830 metres depth with

12 gas bearing reservoirs

• Basement oil play – Vietnam, Malaysia

• Deepwater exploration – Mozambique, Egypt, Cuba,

Mauritania, Brunei, Malaysia

• HPHT exploration – Egypt, Malaysia, Turkmenistan

• Tight gas – Oman

• Carbonates exploration – Malaysia, Indonesia

• Precarbonates – Malaysia

Standout performer Malaysia contributed 72% of total upstream exploration discoveries with 1.4 billion boe in Southeast Asia in 2012

24 discoveries in 2012: 22 in Malaysia, 2 Internationally

6 tscfof hydrocarbon resource in Kasawari field, largest non-associated gas discovery in Malaysia

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World recordSepat oil Phase 1 achieved 1st hydrocarbon within 12 months. Substantially faster than industry average of 28 months.IPA Benchmark

World’s firstPilot implementation of a refurbished wellhead platform concept at D21,a marginal field in Malaysia

External turret – Floating Production Storage Offloading (FPSO) First Deepwater field employing the first Truss Spar Floating Production Unit outside the Gulf of Mexico

Platform construction at Gumusut Kakap, Sabah, Malaysia

World’s heaviest

DEVELOPMENT

Superior Project ManagementPETRONAS EP’s Project Management System is a structured approach to; 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 and global best practices.

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

Delivering Excellence

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First quartile performance for project development schedule, IPA Benchmark in 2012

91%Projects delivered within budget in 2012

• 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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EOR 83 mmstb of oil identified as additional reserves in Malaysia through EOR activities

24 IOR/EOR/IGR production enhancement projects underway

32 first oil and gas production in 2012 from Malaysia and international operations

OverallEquipment Excellence (OEE) of platform performance in Malaysia for Oil 92.6% and Gas 96.1% in 2012

PRODUCTION

Converting Maturing BrownfieldsPETRONAS EP has implemented various brownfield rejuvenation efforts, effectively extending the production life of oil and gas fields with 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.

Optimising Growth

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1971 2011

A matured oil field considered commercially non-viable was revived in 1971 through vigorous production enhancement activities. Today, after 40 years, the oil field is still producing at its optimum rate.

The outlook for PETRONAS’ production and resource addition is a healthy 3.5% Compound Annual Growth Rate (CAGR) over a period of ten years

Baram Delta Production Levels: Enhancing Yields

• Turkmenistan - fully operational to support future gas

production increase at the capacity of 500 mmscfd

• Mauritania Chinguetti field - one of the producing assets

in Mauritania with a reserve volume of 11,652 kbbl

• Higher yields: 440 mmscfd of raw high CO2 gas at Tangga

Barat cluster fields, first application of membrane type

CO2 removal technology

Enhancing Yields with Innovative TechnologiesNew developments in deepwater exploration and production, Carbon Dioxide (CO

2)

management technologies and High Pressure High Temperature (HPHT) technologies have opened up new opportunities for growth and monetisation.

2012 20132011 20142008 20092007 2010 2015 2016 2017

3.5%

E&P Total Production in ‘000 boe per day

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Coal bed methane GLNGPETRONAS embarks on one of the world’s first CBM to LNG projects with7.8 MTPA (onstream target 2015) at Queensland, Australia

Shale gas200 tcf gas in place at Montney Shale, Canada

PETRONAS accelerates upstream growth by venturing into new frontiers with unconventional gas through strategic acquisitions and partnerships with leading oil and gas operators. A joint venture between PETRONAS and Santos in Australia allows us to develop one of the world’s first Coal Bed Methane (CBM) into an LNG processing facility with a 450 km pipeline.

In 2012, Progress Energy Canada Ltd (PECL) was acquired by PETRONAS, bringing in over 1,100,000 acres of Montney rights in Alberta and British Columbia, with over 200 tcf of gas in place.

With this, our Overall Resource Replenishment (ORRR) increased to 3.5x with an improved resource addition of 5,621 mmboe.

UNCONVENTIONALVenturing Into New Frontiers

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Gas-rich shale

OilSandstone

Tightsand gas

Conventionalassociatedgas

Coalbedmethane

Conventionalnon-associatedgas

Shallow water Deepwater Ultra-Deepwater

We have explored some of the world’s most challenging terrains to secure new reserves. Additionally, we conduct deepwater exploration, entering also into highly complex HPHT reservoirs and wells with high CO2 content to enhance our yields.

Our growth portfolio includes unconventional oil and gas - which include shale gas and coal bed methane.  

Today, we are amongst the world’s first in maximising recovery of discovered fields with Enhanced Oil Recovery (EOR) efforts.

Cutting-edge technologies are applied alongside new strategies to rejuvenate brownfields, extracting maximum value from existing reservoirs.  In consistently delivering some of the world’s first - pipelines, platforms and projects, we have brought oil and gas onstream ahead of schedule - providing rapid return on investment for our partners, stakeholders and investors.

PETRONAS’ facilities &

hydrocarbon plays

Our Experience in Resource Playtypes • Heavy oil • Deepwater• Basement oil• Tight gas

• Onshore• HPHT• EOR

• High CO2 Gas• Coal bed methane• Shale gas

MAKING IT POSSIBLEPETRONAS EP’s Strength And Capabilities

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PETRONAS E&P Technology DivisionWithin the PETRONAS E&P Technology Division is the E&P Technology Centre which seamlessly integrates Research and Development (R&D), Field Development Plan (FDP) and technology deployment to accelerate the development and production of EOR and high CO2 gas fields.

Patented TechnologiesPETRONAS has commercialised some of its patented technologies to improve production yields, enhance operational efficiency and deliver exacting results. From CO2 removal membranes to solids removal and Water Alternate Gas (WAG) oil recovery methods, we continue to make breakthroughs in technology and engineering.

ADVANCING TECHNOLOGY& ENGINEERINGDevelopment And Deployment Of Technologies

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273 patents filed by PETRONAS

CO2removal technology - Reduced CO

2 blend to

8 mol% compared to initial blend of 37 mol%

40%reduction in CAPEX for development of high CO

2

content gas fields

440 mmscfd of raw high CO

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gas at Tangga Barat cluster fields, Malaysia, first application of membrane type CO

2

removal technology

SolidClenz™A custom-formulation to remove organic and inorganic solid deposits in production well tubings and well bores for improved Return On Investment (ROI) on chemical treatment.

SmartCen™An online real-time metering supervisory system designed for all metering operations which support centralised data for remote monitoring, diagnostics and analysis.

PN-1™ Multi-Layer MembranePN-1™ membrane improves separation efficiency by using properties of multiple membrane fiber.

PIPEASSURE™ A pre-impregnated composite resin system for onshore and offshore pipeline repairs. A cost-effective corrosion protection technology that requires little or no operation shutdown. A JEC Asia Innovation 2012 award winner.

iCON® A steady-state and dynamic process simulaton software for the enhancement of operational performance, design and process optimisation.

PETRONAS’ Patented Technologies

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PEOPLE DEVELOPMENT

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.

The PETRONAS upstream live plant located at INSTEP offers our engineers and technicians hands-on experience in a simulated EP environment.

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.

Ensuring A Sustainable And Skilled Talent Stream

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EP CAPABILITY DEVELOPMENT FRAMEWORK

UN

CONVENTIO

NAL HYDROCARBONC

APABIL

ITY D

EV. FRAMEWORK

LE

A

DE R S

HI

PHSE

TECHN

ICA

L SK

ILL

G

ROUPS’ COMPETENC

Y D

EVELO

PM

ENT Develop

competent andcapable geoscientists

contributing to business targets

Build EP capabilities in unconventional hydrocarbon field

development

Provide broader knowledge for drilling

engineers to understand and better

appreciate other disciplines and

divisions

Develop and sustain EP production

operations’ capability in meeting operational

excellence targets

Develop wholesome petroleum engineers

with better appreciation of EP

value chain

Enhance project management

capability to improve project performance

and delivery

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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.

6.5 millionsafe manhours without LTI: Miri Crude Oil Terminal, Malaysia

6.7 million safe manhours without LTI: Angsi platform, Malaysia

4.5 millionsafe manhours without LTI: Myanmar

HEALTH, SAFETY & ENVIRONMENTCommitted To HSE Excellence

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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.

COMMUNITIES

• SUDAN: Debate and quiz competition for secondary

school and university students • Annual scholarship

programme for top 100 achievers

• SOUTH SUDAN: Refurbishment of Rejaf educational

centre for the blind: 15 Braille machines, 250 slates, stylus

and 200 folded cranes

• MALAYSIA: Refurbishment and upgrade of existing

longhouses at Uma Akeh Miri • Supply of building

materials for 7 small settlements within Sg Adang Territory,

Limbang • Provided 24 water tanks to Ladang Paroh

Village, Bintulu to improve water supply

Communities and Capability Building

Socio-Economic Development

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For further information, please contact:

Corporate Affairs & AdministrationPETRONAS Exploration & ProductionLevel 24, Tower 1, PETRONAS Twin TowersKuala Lumpur City Center, 50088 Kuala Lumpur, MalaysiaTel: +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

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

©2013 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 2012.

PETRONASExploration & Production

www.petronas.com