Petroliam Nasional Bhd (Petronas) is aiming to produce oil at a break-even price of US$50 per barrel, down from the US$60–70 range over the past five years, as part of efforts to counter declining profits and a volatile global oil market.

Chief Executive Officer of Petronas' upstream division, Mohd Jukris Abdul Wahab, said the company is targeting more cost-effective international assets and aiming to reshape its global portfolio. "We want to reshape the entire portfolio," he said in a June 13 interview on the 79th floor of the Petronas Twin Towers. "We are preparing ourselves, moving into a more volatile environment in the future."

Petronas currently produces the equivalent of about 2 million barrels per day in Malaysia and around 700,000 barrels abroad. Jukris said new fields must be brought in to offset declines from ageing assets. The group intends to raise the net present value of its international upstream operations to around 60% in the next five to 10 years, from the current 40–50%.

The company plans to focus on countries where it already operates—including Canada, Suriname, Brazil, Turkmenistan and several Southeast Asian nations—but remains open to new regions that offer "headroom for us to grow," said Jukris.

Even as it looks abroad, Petronas remains optimistic about domestic prospects. Jukris said Malaysia's oil reserves could still last for "another 15, 20 years," thanks to continued investor interest and discoveries, especially off Peninsular Malaysia. "For the last 10, 15 years, we've been saying that our reserves will last only 15 years," he noted.

Petronas' challenges have broader implications for Malaysia's economy. The state-owned oil giant has pledged RM32 billion (US$7.5 billion) in dividends for this year, down sharply from RM50 billion in 2022. Since its inception in 1974, Petronas has injected RM1.4 trillion into the nation's economy via dividends, taxes and payments.

The shift in strategy comes amid a slump in oil prices since their 2022 peak, which has forced the company to reduce dividends and announce plans to trim its workforce by about 10%. Although oil prices rebounded slightly after geopolitical tensions rose following Israeli air strikes on Iran, the long-term supply-demand outlook remains weak.

"Any capital deployment for our international asset has got to provide healthy return," Jukris said. "We are dealing with a lot more risk in some of the geographies that we are present."