Why PETRONAS Has No Excuse to Delay Investments Now
CIMB Securities has thrown down a clear message: Petroliam Nasional Bhd (PETRONAS) should stop sitting on its hands. According to the research house in a sector note released on Monday (June 22), elevated crude oil prices have removed the main excuse for further investment delays at Malaysia’s national oil company.
The mathematics are straightforward. Higher oil prices improve the project economics and cash flows needed to justify capital expenditure. Current Brent crude prices trading between US$75 and US$80 per barrel represent a meaningful threshold for upstream viability.
CIMB Securities forecasts Brent prices at US$85 per barrel in H2 2026 and US$80 per barrel in H1 2027—price levels that historically support sustained upstream investment activity. This is no longer theoretical pricing; the market is already pricing in these assumptions.
PETRONAS carries two major advantages that amplify this opportunity. First, the national oil company maintains substantial cash reserves to fund new projects. Second, it has just completed a workforce restructuring exercise initiated in 2025, removing an operational constraint that previously weighed on spending decisions.
“We believe there are few reasons for PETRONAS to continue delaying investments,” CIMB Securities stated bluntly. The implication is clear: the window for action is now open, and waiting further could cost the company billions in missed opportunities.
What Headwinds Still Face PETRONAS?
Not everything is smooth sailing. PETRONAS faces two material cash constraints that could temporarily offset stronger oil-driven cash flows.
The most significant is the company’s acquisition of Saudi Aramco’s 50% stake in the Pengerang Refining Company Sdn Bhd and Pengerang Petrochemical Company Sdn Bhd (PRefChem). This landmark investment requires substantial cash commitments that will weigh on the balance sheet over multiple quarters.
Additionally, potentially higher dividend requirements from the government could limit the cash available for capital projects. As a state-owned enterprise, PETRONAS must balance shareholder returns with strategic reinvestment needs—a perpetual tension for national oil companies.
However, CIMB Securities characterises these constraints as temporary headwinds. They can be “partly offset by stronger cash flows from higher oil prices,” the research house noted. In other words, the long-term tailwind of elevated crude prices should ultimately overpower near-term dividend and acquisition pressures.
Which Bursa Malaysia Oil and Gas Stocks Could Benefit?
CIMB Securities maintains an “overweight” rating on the oil and gas sector, grounded in the expectation of recovering upstream capital expenditure. If PETRONAS unleashes billions in delayed capex, the beneficiaries won’t be PETRONAS alone—they’ll be the oilfield services and support companies that supply equipment, labour, and logistics.
The research house has named three preferred picks for investors monitoring this recovery cycle:
- Dayang Enterprise Holdings Bhd (KL:DAYANG)—Currently trading at 10 times price-earnings, below its five-year average of 12 times. CIMB notes potential for earnings upgrades as upstream spending recovers.
- Dialog Group Bhd (KL:DIALOG)—A key catalyst is the financial close of the Pengerang Energy project, which could unlock revenue visibility.
- MISC Bhd (KL:MISC)—Positioned to benefit from increased offshore support vessel demand.
Beyond CIMB’s core picks, other potential beneficiaries include Velesto Energy Bhd (KL:VELESTO), a drilling services provider; Keyfield International Bhd (KL:KEYFIELD), an offshore support vessel operator; and Perdana Petroleum Bhd (KL:PERDANA), another offshore services player.
The thesis is logical: as PETRONAS and other upstream operators increase spending, they’ll need more drilling rigs, more support vessels, more equipment, and more contractor hours. These listed oilfield services companies are positioned on the front line of that spending wave.
Why Oil Prices Matter More Than You Think
The current crude oil price environment reflects a delicate balance of global supply dynamics. Brent prices of between US$75 and US$80 per barrel suggest that the market is pricing in relatively smooth normalisation of oil flows through the Strait of Hormuz, following progress in negotiations between the US and Iran, according to CIMB Securities.
However, the recent Middle East conflict has left scars on global inventories. CIMB Securities estimated that cumulative supply losses during the conflict had exceeded one billion barrels. That’s not a rounding error—it’s a structural deficit that will take time to reverse.
The impact has been masked so far by lower global refinery utilisation, alternative export routes used by Persian Gulf producers, and strategic petroleum reserve releases. But once inventories stabilise, the underlying demand fundamentals reassert themselves.
Replenishing depleted inventories and rebuilding supply buffers could take at least a year, CIMB Securities projects. This inventory rebuild cycle will support crude oil demand and keep Brent prices above US$70 per barrel even if Middle East flows normalise in the near term. “This remains a healthy price level to sustain upstream investment activity,” the research house concluded.
For Malaysian investors, the implication is straightforward: the commodity supercycle isn’t over. It’s just entering a new phase where supply discipline and inventory management matter as much as geopolitical headlines.
The Risk of Delayed Decisions
CIMB Securities also issued a warning to oil companies sitting on the sidelines. If upstream operators continue delaying investment decisions, they risk missing the current investment cycle and facing longer lead times for equipment and services.
Think about it: if all major oil companies wait until oil prices are US$100+ per barrel to greenlight projects, the supply chain bottlenecks will be brutal. Equipment manufacturers will face years-long backlogs. Skilled labour will be scarce and expensive. The cost of delay compounds exponentially.
This is why PETRONAS and other operators should act now while oil prices are elevated but supply chains aren’t yet strangled. By moving first, they lock in better pricing on services and avoid the worst of capacity constraints.
What Should Retail Investors Monitor?
For retail investors on Bursa Malaysia, this CIMB Securities thesis creates a concrete monitoring framework. Track quarterly earnings and guidance for the oilfield services stocks mentioned above—Dayang (DAYANG), Dialog (DIALOG), MISC (MISC), Velesto (VELESTO), Keyfield (KEYFIELD), and Perdana (PERDANA).
Watch for contract announcements and order book updates. As PETRONAS and other operators greenlight capex projects, oilfield services companies will announce new contracts and revenue visibility. These announcements precede actual earnings accretion by 2–4 quarters, giving early-moving investors an information advantage.
Monitor PETRONAS quarterly results for capex guidance. If the national oil company raises its capital spending guidance in the next earnings report, it signals confidence in higher oil prices and validates the CIMB thesis. If capex guidance remains flat or declines, it suggests management isn’t yet convinced.
Also track Brent crude prices. If prices sustain above US$80 per barrel, the probability of PETRONAS investment acceleration rises sharply. If prices slip below US$70, the thesis weakens materially.
For deeper analysis on individual stock opportunities, consider using AI-powered stock analysis tools for Malaysian equities to model earnings scenarios and valuation multiples as the sector recovers.
Key Takeaways for Your Portfolio
- CIMB Securities forecasts Brent crude at US$85 in H2 2026 and US$80 in H1 2027, creating a multi-year window for PETRONAS capex acceleration.
- PETRONAS has substantial cash reserves and completed workforce restructuring, removing operational and financial barriers to investment.
- Three CIMB-preferred picks: Dayang (trading at 10x P/E vs. 12x five-year average), Dialog, and MISC—each positioned to capture oilfield services demand.
- Drilling, offshore support, and contractor services companies could see earnings upgrades as upstream capex projects commence over the next 12–18 months.
- Supply chain constraints and long lead times mean delaying projects now risks higher costs later—a tailwind for oilfield services companies positioned to capture the rush.
The thesis is compelling: elevated crude oil prices have shifted the risk-reward calculus for PETRONAS and Malaysia’s oil and gas sector. The national oil company has few excuses left to delay. The question now is whether management will seize this window while it remains open.
Disclaimer: This article presents analysis and forecasts from CIMB Securities and is intended for educational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. Retail investors should conduct their own research, consult a licensed financial adviser, and assess their individual risk tolerance before making investment decisions on Bursa Malaysia.
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Research Note: Analysis referenced in this article is based on research published by CIMB Securities. This blog summarises publicly available information for educational purposes only.
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