The government will work with petroleum industry players in deregulating prices and eliminating market distortions to keep the sector vibrant.
Deputy Finance Minister Senator Datuk Donald Lim Siang Chai said being pro-active and respon-sible should help sustain the nation's energy resources for future generations.
Lim said Malaysia must not be complacent amid the revival of the oil and gas upstream sector and the rosy outlook for the local oil and gas industry
"As the sun shines on Malaysia's oil and gas industry, it is the right time for us to make strategic inroads towards having a major role in the global energy business and to help solve the world's acute energy conundrum," he said at the opening of the Production Optimisation Week Asia 2011 forum here yesterday.
The government, Lim noted, has unveiled various incentives to spur exploration of relatively less profitable marginal fields and boost production volumes.
They include income tax reductions of up to 25 per cent from 38 per cent, investment tax allowance on capital expenditure, reduction of petroleum income tax, accelerated capital allowance and waiver of export duty for niche EDP (exploration, development and production) companies.
Lim said to stay internationally competitive and utilise scarce energy resources effectively, Malaysia and its neighbours in Southeast Asia should leverage on proprietary technologies used by major oil companies like Total, Royal Dutch Shell and ExxonMobil.
Malaysia's oil and gas sector contributes a large amount to the country's gross domestic product.
"Last year, Malaysia's petroleum exports amounted to RM101.2 billion, up 24 per cent from 2009, a growth in part due to high oil prices but also dependent on maintaining and improving production levels and exceed targets," he noted.
Over the last 10 years, such exports have been growing at an annual average of 13.5 per cent.