- 1 year ago
In this exclusive Niaga Awani interview, PETRONAS President and Group CEO and Energy Asia Chairman, Tan Sri Tengku Muhammad Taufik shares his views on Asia’s clean energy transition, regional collaboration, and how PETRONAS is reshaping itself to stay resilient, sustainable, and globally competitive.
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00:00Hello and thank you for joining us on Niaga Awani. I'm your host Nina Rosman. Today is a very special episode where we are honored to be joined by the president and group of COF Patronas, Tan Sri Itengku Taufik with us.
00:21I want to say thank you very much Tan Sri for joining me. Definitely out of these three days you've been busy, hectic and definitely a lot of questions to be answered within this.
00:30Firstly, coming out of Energy Asia 2025, definitely we've heard bold ambitions of how can we transition cleaner energy across the Asia.
00:39And from your vantage point of view as the regional energy leader, how will you assess the current region's stance in turning all of this ambition into bankable and large-scale execution, Tan Sri?
00:53Thank you for the question and thank you to Astro for having me as part of the show. We value the support that you've given.
01:03Energy Asia has surfaced a number of realities that we expected, in fact.
01:10The degree of pragmatism required by the region in delivering an energy transition.
01:16Like it or not, at the heart of ASEAN with 700 million people, with an energy demand trajectory, I think our Prime Minister himself highlighted that in Malaysia there's a 6.5% demand growth expectation over the next few years.
01:30And in fact, with the entire region showing a push towards urbanization, growth in middle income, more industrialization, as well as now adoption of more digitalization, and of course the influx of AI and data centers,
01:46we are going to look at the region continuing its trajectory of 3% to 4% growth, which it has exhibited since the beginning of this century.
01:55With this kind of expectation, addressing energy demand now needs to be carefully curated and planned.
02:01So as a region, while we are abundantly endowed with natural resources, we still have multi-TCF finds of natural gas.
02:08We still have discoveries of oil.
02:10So in responding to how we create a more sustainable future for the region, clean energy investments or carbon abatement projects, for that matter, need to come hand in hand.
02:21And at Energy Asia, what was surfaced is the degree of pragmatism will need to be reflected in delivering energy in a way that is affordable, secure, reliable,
02:34because it needs to still support economic activity and industrialization, but with an eye on the planet's climate health.
02:42We are also at the center of the region with an archipelago of more than 20,000 islands, hundreds of thousands of kilometers of coastline.
02:50We are the most prone to facing climate change challenges.
02:55And anywhere from flooding, anywhere from soil erosion, soil movement, we are at risk.
03:01And we do not want to have to contend with climate refugees year in, year out.
03:07So this balance in pursuing delivering energy security for the region needs to also address the dimension of cleaner energy so we'll have a more sustainable future.
03:19And one of the strong team we noticed from Petrona this year is to focus our emphasis on collaborations,
03:25not just between the governments, corporations, but also between borders, technologies and even industries.
03:31Why is collaboration such a key focus for Petrona at Energy Asia?
03:37In Energy Asia, one key observation and indeed what we deliberately planned for was to have cross-sectoral participation.
03:44You will not see this forum being dominated by only oil and gas players.
03:49You see power and utilities present.
03:51You see clean tech providers, financial institutions.
03:54We can't only think about collaboration from the lens of being within one industry.
04:00We have to make sure that the eventual energy system addresses the entire shift towards a lower carbon, if not a zero carbon system.
04:09This is why collaboration underpins the rallying call for Energy Asia.
04:15As we ask people to support the journey to deliver Asia's energy transition, we can't do this without having, as you mentioned, across borders, across sectors, across industries, the kind of cooperation levels unprecedented.
04:30A very good example and a proof point of this is what we've done with Vietnam, which has had an abundance of offshore wind.
04:36Malaysia is going to take that and also transport it through to Singapore.
04:42This requires not only the expertise from people like ourselves and Petro-Vietnam for offshore construction, but also the stability of the grid.
04:51The expertise comes from national utilities so we can serve markets in Singapore that really require them.
04:57But in doing this and emulating this, a lot of capital needs to flow into the region.
05:05I highlighted almost 90 trillion US dollars need.
05:08Our prime minister said just to upgrade the grid, we will need north of 43 billion ringgit and TNB has to deploy this.
05:16But this is capital that's sorely needed to support the demand I just mentioned earlier.
05:21And definitely this is an amazing journey for Petronas.
05:25And amidst all the strategic dialogue, partnerships and even vision sharing at Energy Asia, let's bring it home, Tan Sri.
05:33What does it mean for all of us, especially for Malaysia?
05:36For Malaysia, particularly given our role this year, and I don't want to speak out of turn,
05:42our prime minister has played a pivotal role with Malaysia being the chair for ASEAN.
05:48We stand at a unique cusp of a period where unprecedented levels of understanding and collaboration can be enabled.
05:57ASEAN has enjoyed very long periods without conflict.
06:02ASEAN has collectively, even though it's at different paces and people have different starting points,
06:06all heading towards mass urbanization, more industrialization,
06:12and everyone pursuing their own dimension and version of the Fifth Industrial Revolution.
06:17In order to service all this, I think the only way to actually ensure,
06:22and we had an opening montage that demonstrated that even though the region had an abundance of resources,
06:28be it depleting or renewable, long coastlines, abundant solar irradiance,
06:36however demand centers and where this can be found are two different places.
06:41And we have to make sure there is reach, there is inclusivity,
06:45and this fits well with what ASEAN wants to deliver, sustainability and inclusivity.
06:50Sustainability and inclusivity, it's one of the objectives that we want to bring forward
06:54so we can lead the conversation moving forward, and how can we shape the future of Energy Asia.
07:01And over the past few days at Energy Asia, definitely a lot of delegation,
07:05almost around 4,000 with 52 sponsors, corporate sponsors,
07:10and then we have almost 180 speakers internationally.
07:15And some of the regional leaders also highlighted the complexity they face.
07:20One of the challenges that ASEAN faces from navigating or accelerating the clean energy transition
07:26to navigating acidity to geopolitical tensions, specifically for Petronas.
07:32How does Petronas' transformation plan to address directly to all of these realities across Asia?
07:40Much like any other investor within the energy space, and pretty much any investor in general,
07:47what you're looking for is policy coherence, what you're looking for is the right amount of return
07:52for the right amount of risk so that capital can be deployed.
07:55At the sidelines of Energy Asia, there was a caucusing of many energy leaders in a forum we called EGLE,
08:02and there was a good, very good, transparent, open and candid conversation around why this is not happening enough.
08:09There is a disproportionate amount of spend for renewable and clean tech if we strip out China.
08:18If we strip out China, ASEAN maybe enjoys at best up to only 15% of the kind of shift in energy transition spending.
08:28And we have this dimension to contend with because policy does not start equally for everyone in ASEAN.
08:36We've got people with less mature economies, and we are looking at a phenomena where we have people earning U.S. $2,000 GDP per capita,
08:46all the way up to $93,000.
08:49So the policy responses, the carrot and sticks, the incentives that we deal with are different.
08:54But what we can work together with many of our contemporaries is even in delivering the conventional sources of energy,
09:03we can commit to make sure that it's delivered cleaner with less emissions.
09:07Very good example, Petronas has worked towards getting gold certification under OGMP, the methane principles.
09:14We are avoiding zero routine flaring and venting, so that even as we deliver energy today, it's cleaner with existing systems.
09:23While that's being done, Petronas is taking the steps, as you know, having a clean energy vehicle like Gentari,
09:29delivering clean energy solutions through renewables, a target of at least 20 gigawatts,
09:34and of course, green hydrogen, and promoting green mobility.
09:38From small plan to big plans, from short-term to long-term planning, how will Petronas accelerate its growth moving forward?
09:47This is the challenge.
09:49We are in a period, and I think you've heard this term before because Petronas is now using it a little bit more liberally,
09:54it's polycrisis.
09:56We are going through a period of change which has grown in frequency, grown in scale of disruption,
10:03and I think we cannot do an about-face.
10:07When we take on capital decisions, we take on capital decisions with an investment horizon
10:13that goes beyond any government administration period or elected governments period.
10:19We have to make sure that we serve the needs of our customers while taking care of our stakeholders,
10:27while being responsible.
10:28And in doing so, these investments will need to be done with a long-term view in mind.
10:35In period, KPIs may not be appropriate as a measure here,
10:40but we are going to push through and remain consistent in delivering what we believe is going to be a preparation for the next system.
10:48Craig, talking about the measure using KPI, probably like you mentioned, it's not suitable,
10:52as all of these situations are full of acidity.
10:56And will Petronas continue to diverse upstream, downstream, international ventures?
11:02How is it downstream?
11:03We manage all our investments as a portfolio.
11:06The process and activity of portfolio optimization is a normal course of activity for any enterprise such as ours.
11:15I think the lens that has been applied here is the apparent perception that Petronas is offloading assets.
11:21In fact, it's using our assets, Petronas is using our assets as currency to grow our funnel beyond this near term.
11:29A very good example, I think now that I can speak about it, we've gone to the JV framework agreement stage with our partner E&I.
11:38Part of our Malaysia assets.
11:39Am I moving too far back for you?
11:41With the JVFA that we've signed with E&I, the assets now help build up a funnel of hydrocarbon production in the future,
11:51giving us a longer life for our total portfolio reserves.
11:56In our partnerships with Total, it is monetizing more difficult fields,
12:00but attaining what we hope to deliver, which is advantage barrels.
12:04We need to deliver them with lower cost and lower emissions.
12:08And all of this is part of addressing the harsh reality of today,
12:13where 70 to 80 percent of our energy systems are still powered by fossil fuels.
12:18You can't displace them overnight, but as we start to roll in renewables, more robust grids,
12:25we need to supply energy to those who need it in a more responsible fashion.
12:29We do this through partnerships.
12:31And what is perceived to be divestment is, in fact, creating a longer runway for Petronas to continue its growth.
12:39All right, amazing.
12:40We look forward to seeing how this conversation turns into action for the region and Malaysia.
12:46Again, Tan Sri, I want to say thank you very much for your time and sharing the insight.
12:49Hope to see you again.
12:51Definitely, I will release you for a very, very busy week for you.
12:53And again, for those who missed out my exclusive interview with Group and Petronas, CEO of Petronas,
13:00Tan Sri Tengku Taufik,
13:02you can catch how the conversation of Petronas not only leads, continues to lead,
13:08the conversations of energy transition, but also shaping the direction of Asia's energy future.
13:15And definitely, you can feature and see all of this in astrawani.com
13:19and across all of our social media platform.
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