49 Management Discussion And Analysis / Business Review DAGANG NeXCHANGE BERHAD Integrated Report 2024 BUSINESS REVIEW Strategic Focus Going Forward The Energy Business Segment is charting a path toward long-term resilience by focusing on operational optimisation, local asset development and strategic integration across the upstream and services value chain. A key priority is to accelerate production from Malaysian brownfield assets, particularly the Abu Cluster, which is expected to achieve first oil in the first half of 2026. This milestone will mark the beginning of a broader production ramp-up plan across the Meranti, A and Beta Clusters. These assets not only offer lower breakeven costs and greater regulatory certainty but also strengthen our control over operations and project timelines. This strategy is also aligned with the Petronas Activity Outlook 2025–2027, which projects stable oil prices and sustained upstream activity within Malaysia’s energy sector. In tandem, the business segment will continue to leverage synergies between upstream and downstream entities, including Ping, OGPC and DDTOS. By expanding tool rental services and exploring low-risk trading opportunities through Ping Energy Marketing Limited (“PEML”) - the marketing and trading arm of Ping - we aim to create a more integrated and efficient operating model that enhances value across the energy lifecycle. The settlement of the Pareto bond and refinancing through EXIM Bank has improved our capital flexibility, allowing us to pursue growth initiatives with reduced financial pressure. At the same time, we are actively exploring opportunities to incorporate natural gas development into our portfolio, in line with global trends toward cleaner energy and ESG-conscious operations. Looking ahead, our strategy is clear: prioritise Malaysian production, deepen internal integration and steadily transition toward a more balanced, costefficient and sustainability-aware energy business. In parallel, we continue to assess and pursue the acquisition of additional producing assets that can strengthen near-term output and reinforce our growth trajectory. ESG-Driven Funding Challenges Risk Description Access to capital for upstream oil and gas projects is increasingly constrained by global ESG expectations and investor preferences for low-carbon assets. Mitigation We continue to demonstrate our commitment to responsible operations by integrating emissions reduction plans, electrification and sustainable development considerations into the Group’s forward planning. We are also exploring opportunities to diversify into cleaner energy pathways, including natural gas development, which aligns with national energy transition goals and global decarbonisation trends.
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