Malaysia is one of the largest oil and gas producers in the Asia-Pacific region with an average daily production of more than 1.8 million barrels of oil equivalent (BOE) in 2021, more than two thirds of which was natural gas. Nearly 70% of its estimated proved reserves of more than 8.2 billion BOE are also natural gas.
Despite its rich natural resources, Malaysia has increasingly relied on imported coal over the past 10 years. Coal now generates 44% of its electricity needs compared to natural gas at 36% and hydropower the third significant source at nearly 17%.
Overall, coal forms 21% of the country’s primary energy mix compared to 35% for natural gas and more than 34% oil – adding up to a 91% dependence on fossil fuels.

The country exports around 40% of its natural gas production, mostly as LNG, with the remainder used domestically for power generation, industry and by households. It exports 42% of its daily average oil production and the rest is used domestically, primarily for transportation.
Malaysia is seeking to reduce its coal use as it works towards meeting its Paris Agreement targets to reduce emissions by 45 per cent. The national oil and gas company, Petronas, has also announced it will achieve net-zero emissions by 2050.
Malaysia’s National Energy Policy 2022-2040, published in September 2022, sets out the country’s plan for energy transition and establishes a series of Low Carbon National Aspirations. Under the plan, the share of national gas in the country’s primary energy mix will be 39% in 2040, while coal and oil will be at 17% and 27% respectively. Renewable energy – hydropower, solar and biomass – will make up the remaining 17%.