Kuala Lunmpur (Feb 28 ) - Although Petroliam Nasional Bhd (Petronas) reported lower earnings for the financial year ended Dec 31, 2025 (FY2025), the group is strengthening its upstream presence in Sabah as part of its long-term growth strategy.
Petronas posted a net profit of RM45.4 billion in FY2025, down 18% from RM55.1 billion the previous year. Revenue also declined to RM266.1 billion from RM320 billion, mainly due to lower average realised prices, reduced sales volume, foreign exchange impacts and the divestment of the Engen Group. The softer performance was partly offset by lower tax expenses, said executive vice president and group chief financial officer Liza Mustapha.
Despite the challenging environment, the company highlighted that its upstream segment achieved RM3 billion in operating cost reductions through improved operational methods and ongoing optimisation efforts. More significantly for East Malaysia, Petronas is reinforcing its domestic upstream portfolio by expanding operations in Sabah with the addition of three new offshore blocks.
The move signals continued strategic focus on Sabah as a key contributor to Malaysia’s oil and gas output. Liza said the upstream business remains focused on strengthening resilience through disciplined cost management and targeted growth.
Group capital expenditure for 2025 totalled RM41.6 billion, with 60% channelled into activities within Malaysia. Total borrowings stood close to RM122 billion, while total assets increased to RM775 billion as at Dec 31, 2025, compared with RM767 billion a year earlier. Shareholders’ equity declined to RM448 billion. Cash flow from operating activities came in at RM85.2 billion, in line with lower earnings before interest, taxes, depreciation and amortisation (EBITDA).
Internationally, Petronas continues expanding its footprint in Suriname, Guyana, the Middle East and Southeast Asia. However, domestically, Sabah’s offshore developments represent a key pillar in sustaining production and reinforcing Malaysia’s energy security.
Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz said geopolitical uncertainties are expected to persist. In response, the group will intensify efforts to strengthen its portfolio and financial position to ensure continued delivery of energy safely and responsibly. Looking ahead to 2026, Petronas aims to scale value-accretive energy investments and lower-carbon solutions in line with its energy transition plans.
For Sabahans, the expansion into three new offshore blocks highlights the state’s strategic importance in Petronas’ upstream plans. Increased exploration and production activities could generate employment opportunities, stimulate supporting industries and enhance economic activity in oil and gas-related sectors. Continued capital spending within Malaysia also reinforces Sabah’s role in the national energy landscape, potentially contributing to infrastructure growth and broader economic benefits in the state.