TotalEnergies Expands Across Asia From Malaysia, Building a Southeast Asia Growth Hub Fueled by Sarawak Gas and Petronas Partnerships

TotalEnergies is accelerating its expansion in Asia with a strategic push into Malaysia, building a robust foothold in Sarawak and signaling the creation of an Asia-focused hub in Kuala Lumpur. The move comes as the French energy giant strengthens its position in Southeast Asia, leveraging Malaysia’s gas-rich basins and its central location to connect with major Asian markets. From a starting point with no assets in Malaysia before 2023, TotalEnergies now commands substantial reserves and diversified opportunities, highlighting a calculated effort to grow gas, LNG, and electricity capabilities across the region. The company’s ongoing collaboration with Petronas, complemented by strategic acquisitions and a broader regional development plan, underscores a forward-looking approach to energy security, energy transition, and value creation for stakeholders. This evolving footprint is taking place amid regulatory negotiations in Malaysia, with Sarawak’s special rights over oil and gas assets shaping the risk-reward calculus for foreign investors. Against this backdrop, TotalEnergies is presenting itself as an anchor player in ASEAN, aiming to transform Malaysia into a key hub for its Asia-Pacific ambitions while balancing local rules, partner ecosystems, and the region’s evolving energy mix.

Malaysia as TotalEnergies’ regional anchor and asset portfolio

TotalEnergies’ initial foray into Malaysia began with a decisive acquisition of SapuraOMV Upstream Sdn Bhd from Austria-based OMV and Sapura Energy Bhd, a move that granted the company operating interests in two Sarawak blocks and access to gas-bearing resources. This entry promptly positioned TotalEnergies as a meaningful international player in Malaysia’s oil and gas landscape. The acquisition added to a growing portfolio in the country and laid the groundwork for a broader relationship with local industry leaders, notably Petronas. The Sarawak blocks opened a path to sizable gas discoveries, signaling the potential to underpin a regional strategy centered on gas supply, LNG development, and power generation. In the context of Malaysia’s energy framework, the Sarawak region represents a significant share of the country’s gas reserves, which account for a substantial portion of Malaysia’s total gas resources and LNG export capacity.

Last week’s agreement with Petronas further augmented TotalEnergies’ exposure to Malaysia’s upstream landscape by securing a 50% operating working interest in two additional Sarawak blocks, SK301b and SK313. These blocks are known to contain gas discoveries with total resource estimates exceeding four trillion cubic feet, adding a tangible, near-term value stream to the company’s Malaysian portfolio. The combination of SapuraOMV assets and the Petronas-backed blocks means TotalEnergies now maintains a substantial gas position in Sarawak, strengthening its capacity to supply natural gas and LNG to regional markets. Beyond these two blocks, TotalEnergies and Petronas will also share interests in several exploration blocks off Malaysia and in at least one block off Indonesia, reinforcing the coalition’s emphasis on regional exploration, risk diversification, and long-term resource development.

This push into Malaysia occurs against the backdrop of broader negotiations between the federal government and the Sarawak state government over development rights for hydrocarbon assets. Sarawak’s gas reserves are estimated to account for about 60% of Malaysia’s total gas reserves and roughly 90% of the country’s LNG exports—a combination that makes the state a focal point for both national energy policy and foreign investment. The ongoing discussions have introduced a degree of uncertainty for some investors, but TotalEnergies’ leadership has consistently argued that a clear, rules-based framework ultimately benefits all stakeholders by reducing ambiguity and enabling more predictable project planning. In this context, the company has sought to emphasize a collaborative approach, stressing that it adheres to the established rules of the game and aims to contribute constructively to the state’s development ambitions. For TotalEnergies, the objective is to grow the overall “cake” rather than to diminish it, a philosophy that informs its strategy in Malaysia and beyond.

The company’s Malaysia-related ambitions also reflect a broader strategic narrative: TotalEnergies seeks to position Malaysia as a regional hub for its ASEAN operations and as a springboard for deeper engagement across Southeast Asia. The leadership has highlighted the long-term potential of Malaysia’s gas basin, underscoring that a strong presence in Malaysia will enable the company to extend its reach into neighboring markets such as Vietnam, Indonesia, and other ASEAN economies. This perspective aligns with a multi-asset, multi-market approach designed to balance gas development with electricity-generation opportunities. Through the SapuraOMV acquisition and the Petronas collaboration, TotalEnergies has laid a foundation for a larger regional footprint, one that includes exploring new blocks, expanding existing assets, and leveraging cross-border opportunities to enhance energy security and energy transition outcomes in Asia.

Beyond the immediate blocks and partnerships, TotalEnergies has underscored a commitment to developing an Asia-focused exploration and development hub in Kuala Lumpur. The plan envisions relocating or expanding teams from France to Kuala Lumpur to spearhead regional exploration activities, signaling the company’s intention to embed local expertise and leadership within Malaysia’s energy ecosystem. By creating a regional hub in KL, TotalEnergies aims to streamline operations, accelerate project timelines, and deepen collaboration with local regulators, PetroSarawak authorities, and Petronas. This hub strategy is designed to facilitate more rapid decision-making, foster closer coordination with regional partners, and establish a robust platform from which to coordinate activities across the ASEAN region. The broader objective is to harness Malaysia’s favorable geographic position in the center of Southeast Asia to connect with East Asia, South Asia, and Oceania, thereby enabling TotalEnergies to execute on a diversified set of gas, LNG, and electricity projects in a timely and efficient manner.

The economic rationale behind these moves rests on several pillars. Gas reserves in Sarawak and the broader Malaysian basins present a stable, long-lived resource base that can underpin LNG exports and domestic gas supply, supporting industrial growth, electricity demand, and regional energy trade. The growing appetite for LNG in Asia, combined with TotalEnergies’ deep competencies in gas handling and LNG logistics, positions the company to capitalize on a structurally favorable market. In addition, the company’s evolving strategy to diversify into electricity complements its gas-centric core, enabling it to deliver more balanced returns across price cycles and to participate more actively in Asia’s energy transition. In this context, Malaysia serves as a critical anchor in TotalEnergies’ regional expansion, offering both the scale of resource potential and the regulatory framework necessary to execute complex multi-block ventures and cross-border energy projects.

Leadership perspective and regional positioning under Patrick Pouyanné

Patrick Pouyanné, who has led TotalEnergies since 2014, has steered the company through a series of shocks, including a global O&G downturn, the Covid-19 pandemic, and the Russia-Ukraine conflict that upended energy markets. Under his leadership, TotalEnergies broadened its strategy from a traditional oil company to a broader energy company, with a clear emphasis on gas, LNG, power, and electricity, alongside ongoing oil production. Pouyanné has often emphasized resilience, long-term value creation, and the need to diversify revenue streams to withstand volatility in commodity markets. He has also highlighted the firm’s willingness to operate in challenging regulatory environments around the world, arguing that a world-class oil major must be prepared to navigate complex governance structures, engage constructively with regulators and governments, and adapt to local rules while preserving shareholder value.

A notable pivot in TotalEnergies’ strategic posture was the company’s decision, around 2020, to shift from an organization centered on “Total” to a broader, more diversified “TotalEnergies” that places electricity, gas, and renewable energy on equal footing with oil. Pouyanné has described this transition as a deliberate move to “engage in electricity,” a choice that was not guaranteed or easy but one that aligned with anticipated shifts in energy demand and the need to decarbonize while maintaining reliability and affordability for customers. This transition has shaped the company’s Asia-specific strategy, guiding decisions about where to invest, how to collaborate with regional partners, and which business lines to prioritize in each market. The emphasis on electricity also informs TotalEnergies’ approach to Asia, where growing electricity demand and the push toward decarbonization create opportunities for hybrid energy solutions that combine gas-fired generation, renewables, energy storage, and cross-border power projects.

Pouyanné has emphasized that the aim in Malaysia, as elsewhere, is not simply to acquire more assets but to grow the overall “cake” by expanding the company’s footprint in a way that complements existing partnerships and creates enduring value. He has repeatedly stressed that the company’s presence in Asia should be anchored by a balance between operational excellence, regulatory compliance, and constructive engagement with state authorities, investors, and industry peers. In Malaysia, that balance has translated into a pragmatic approach: pursue strategic acquisitions and partnerships, establish a Kuala Lumpur-based hub, deepen collaboration with Petronas, and pursue targeted expansions in gas, LNG, and electricity. Pouyanné’s philosophy also recognizes that TotalEnergies’ home country, France, has limited hydrocarbon resources, which has reinforced the company’s global outperformance in markets where local energy security and local regulatory frameworks require a pragmatic, collaborative, and forward-looking approach.

In discussing the region’s prospects, Pouyanné has highlighted the importance of Asia as a dynamic engine for energy demand growth. He points to the region’s rapid development, infrastructure expansion, and rising electricity requirements as drivers of TotalEnergies’ investments in gas and electricity. He has also noted the strategic importance of forming and maintaining strong partnerships with regional players like Petronas, which provide local expertise, regulatory coherence, and market access that can accelerate project execution. The interview material reveals a clear strategic intent: to position TotalEnergies as a leading, long-term partner in Malaysia and Southeast Asia, contributing to energy security while advancing the company’s dual objective of delivering conventional energy today and building a more diversified, lower-carbon energy mix for tomorrow.

TotalEnergies’ leadership has also addressed the regional regulatory landscape with openness and pragmatism. The company has acknowledged that the regulatory environment in Sarawak and Malaysia can present uncertainties, and it has stressed the importance of clearly defined rules of engagement, predictable fiscal terms, and transparent governance structures. Pouyanné has stressed that the goal is to support the development of gas resources and LNG exports in a way that respects local laws and governance frameworks, and that fosters trust with stakeholders, including government bodies and local communities. In Malaysia, he has underscored that the framework is now clearer, while acknowledging that some details require further clarification. This emphasis on regulatory clarity is critical for attracting continued foreign investment and enabling long-term planning for major energy projects that involve multi-year commitments and capital-intensive development programs.

The leadership’s forward-looking posture also includes a global context: TotalEnergies’ ongoing pivot toward electricity, renewables, and lower-carbon solutions is intended to complement its traditional oil and gas businesses. Pouyanné has articulated a vision where the company leverages its strengths in gas and electricity to offer a balanced energy portfolio that can adapt to changing energy economics and policy landscapes. He has asserted that this approach is not driven by greenwashing but by a pragmatic assessment of profitability and cash generation. The aim is to deliver sustainable returns to shareholders while ensuring the company remains a reliable energy supplier for today and a capable developer of future energy systems. In this view, Malaysia is not a one-off opportunity but a strategic pillar in a broader plan to expand TotalEnergies’ high-value gas, LNG, and electricity activities throughout Asia.

Two-pillar strategy: LNG and electricity, with Asia at the center

TotalEnergies maintains a two-pillar strategic framework that anchors its growth in Asia: LNG and electricity. The company has historically been a major player in the LNG market—ranking among the top private sector LNG operators globally—and it remains committed to expanding LNG capacity, trading, and gas-to-power projects across Asia. The leadership emphasizes that gas remains a critical transition fuel, capable of displacing coal in power generation and providing reliable baseload capacity as the energy system evolves toward higher shares of renewables. This perspective aligns with TotalEnergies’ ambition to be the leading LNG supplier in a region characterized by rising demand from industry, power generation, and export-oriented gas markets.

At the same time, TotalEnergies’ strategy deliberately expands into electricity, reflecting a recognition that modern energy systems require integrated solutions. The electricity business, historically a smaller fraction of the group, has grown substantially and is expected to continue expanding. The company projects that electricity will rise from around 10% of TotalEnergies’ business to approximately 20% within five years, reflecting both incremental investment returns and the broader transformation of the energy mix. Asia presents a particularly nuanced environment for electricity, given varying regulatory regimes, market structures, and levels of liberalization. In some markets, governments regulate and govern electricity supply tightly, which can constrain traditional trading and distribution activities. TotalEnergies’ response has been to pursue strategic collaborations and project-based ventures, including distributed generation, cross-border supply arrangements, and large-scale renewables and gas-fired power assets. These efforts aim to deliver reliable electricity while leveraging the company’s existing gas and energy infrastructure knowledge.

TotalEnergies’ electricity strategy is not limited to fixed, one-country projects. The company has identified cross-border opportunities, such as a major project aiming to supply electricity from Indonesia to Singapore. This cross-border initiative contemplates linking an Indonesian gas or renewable energy portfolio with Singapore, employing a subsea cable to deliver power. The plan envisions approximately 1 GW of baseload, 24/7 electricity to Singapore, requiring substantial upstream development and investments in interconnection infrastructure. The scope includes building a project spanning multiple years and a multi-billion-dollar investment program, with Indonesia benefiting from domestic electricity production while Singapore gains access to a cleaner and more reliable energy source. The project represents a practical example of TotalEnergies’ integrated energy strategy in Asia: combine gas, renewables, and electricity networks to create value across borders and markets.

In parallel, TotalEnergies is pursuing a broader set of electricity and energy-transition initiatives in Asia. The company has already developed distributed generation arrangements with partners such as ENEOS in Japan, with assets in Japan and Korea, and with offshore wind assets in Taiwan. These activities illustrate a diversified approach to electricity that includes both traditional generation and renewable energy assets. The cross-border Indonesia-Singapore project, in particular, showcases the potential for regional scale and multi-country collaboration, consistent with TotalEnergies’ ambition to be a leading energy provider in Asia. While cross-border projects face regulatory, technical, and logistical challenges, the company remains committed to pursuing these opportunities as part of its broader strategy to meet rising electricity demand and to support decarbonization objectives across the region.

TotalEnergies’ multi-market outlook is anchored by a pragmatic risk management approach. The company recognizes that Asia’s electricity markets can be highly regulated and market structures differ markedly from those in North America or Europe. To navigate this, the company emphasizes partnerships with established regional players, robust governance, and a careful balance of capital intensity, risk, and potential return. The objective is to build a durable platform that can deliver steady cash flows through electricity while maintaining a strong gas and LNG foundation to support near-term energy requirements. In this sense, the two-pillar approach is not simply a diversification strategy but a coherent, long-term blueprint for sustaining growth in Asia’s evolving energy landscape.

Gas, reserves, and the regulator landscape: ensuring clarity and stable growth

TotalEnergies’ Malaysia operations are anchored by a strong gas position, anchored in Sarawak and other basins. The company has indicated that its primary reserves in Malaysia are concentrated in Sarawak, with some potential for additional resources in Sabah. This concentration supports a straightforward operational strategy: maximize gas production, optimize LNG export capacity, and leverage domestic gas to power generation. The company’s confidence in Sarawak’s gas basin reflects the recognition that the state plays a critical role in Malaysia’s energy balance and export dynamics. In addition, the collaboration with Petronas in Sarawak underscores a joint approach to developing gas fields, optimizing field development plans, and ensuring efficient reservoir management.

The regulatory environment is a crucial factor in Malaysia’s energy equation. Pouyanné has acknowledged that regulatory clarity is essential for enabling long-term investment and cross-border collaboration. He noted that a recent discussion with the Sarawak government and Petros has clarified many regulatory aspects, while also acknowledging that further details require alignment. TotalEnergies has emphasized its commitment to working within the laws and rules of the game and to respecting the roles of various stakeholders, including state authorities and national regulators. This stance, coupled with a clear plan to grow the gas cake rather than merely dividing it, reflects a mature approach to governance and stakeholder engagement that TotalEnergies seeks to sustain in Malaysia.

From a strategic perspective, TotalEnergies sees Malaysia as a gateway to deeper engagement with ASEAN, leveraging its central location to build a regional network of gas, LNG, and electricity projects. The company believes that Malaysia’s gas basin offers a reliable resource base that can underpin long-term export strategies as well as domestic gas supply for power generation and industrial use. The overall objective is to expand TotalEnergies’ regional platform in Asia by scaling up gas assets, expanding LNG capacity, and investing in electricity projects that will deliver stable cash flows and help finance future growth initiatives. In this frame, regulatory clarity and predictability are fundamental to achieving sustained expansion and consolidating Malaysia’s role as a strategic hub for TotalEnergies in Asia.

The regulatory dialogue has also touched on carbon management and climate policy as part of the energy transition. TotalEnergies views carbon capture and storage (CCS) as a critical technology to support net-zero ambitions, particularly for hard-to-abate sectors such as cement and heavy industry. The company has highlighted ongoing CCS activities in Europe with Norway’s Northern Lights project and partnerships in Asia, including potential, future CO2 transport and storage schemes with regional players. In Malaysia, the company has discussed CCS as part of a broader decarbonization strategy, recognizing that capture remains technically and economically challenging, while transport and storage infrastructure could unlock substantial value for regional industry. The development of CCS in the region is linked to regulatory frameworks, the availability of depleted fields for storage, and the presence of potential industrial CO2 emitters. The company’s stance is that CCS is essential for achieving net-zero targets and for providing a feasible pathway for decarbonization in heavy industry, cement, and other sectors that are difficult to electrify completely.

In this context, TotalEnergies has engaged in cross-border CCS discussions with Petronas and related partners, exploring how Japan and other markets could participate in CO2 transport and storage in Southeast Asia. The collaboration aims to advance CCS capabilities, leveraging Malaysia’s geology for storage while identifying international customers who may require negative-emission services. The regulatory framework in Malaysia is gradually evolving to accommodate CCS activities, and the government has moved to formalize certain rules through legislative measures and policy roadmaps. While there remain details to clarify, the company regards the policy development as a positive signal that enables long-term planning and investment in CCS infrastructure. This progress underlines TotalEnergies’ commitment to integrating CCS into its regional strategy while contributing to Malaysia’s broader decarbonization objectives.

The road ahead: expansion in Southeast Asia and ongoing commitments

TotalEnergies’ Asia strategy is not confined to Malaysia alone. The company has looked to expand its footprint beyond Malaysia’s borders, including ongoing exploration and development in Indonesia and opportunities in Vietnam and other ASEAN markets. The overarching objective is to consolidate a regional platform that can manage gas, LNG, and electricity activities in a way that complements local markets and regulatory settings. The collaboration with Petronas extends beyond Malaysia, reflecting a broader alliance that includes joint ventures in Brazil, Angola, and Iraq. This history of collaboration demonstrates TotalEnergies’ willingness to work with trusted local partners to navigate complex regulatory environments, adopt best practices, and deliver projects that generate sustainable value for stakeholders.

The leadership remains focused on delivering a balanced mix of near-term gas and LNG returns while building a durable electricity business for the medium to long term. The company’s plan to establish a Kuala Lumpur-based exploration hub is a central pillar of this approach, designed to accelerate development in the ASEAN region as well as to facilitate a more integrated Asia-Pacific energy strategy. By combining gas development, LNG expansion, and electricity projects, TotalEnergies intends to offer reliable energy solutions that support rapid growth in demand while addressing the region’s commitments to decarbonization and energy security. The cross-border Indonesia-Singapore project is indicative of the type of scale and ambition the company seeks in Asia: a large, multi-country project that can demonstrate the practicality and profitability of integrated energy solutions that blend traditional fuels with advanced power technologies.

At the same time, TotalEnergies recognizes that energy markets are dynamic and subject to geopolitical and market fluctuations. The company has shown a willingness to adapt to changing conditions, adjusting its plans for asset development, partnerships, and cross-border pipelines as necessary to maintain momentum. In Malaysia, where Sarawak’s regulatory environment continues to evolve, the company’s approach emphasizes patience, disciplined investment, and a willingness to engage in dialogue with authorities to secure a favorable operating framework. This balanced stance is consistent with TotalEnergies’ broader global strategy: to secure energy today while investing in the technologies and businesses that will shape the energy system of tomorrow. The Malaysia chapter, with its growing gas reserves, expanding LNG prospects, and burgeoning electricity plans, is positioned to be a cornerstone of that strategy for years to come.

Conclusion

TotalEnergies is pursuing a bold, multi-layered expansion in Asia with Malaysia at the center of its regional growth narrative. Through SapuraOMV’s assets and the Petronas partnership in Sarawak, the company has established a substantial gas position that supports LNG export capacity and domestic gas supply, reinforcing Malaysia’s strategic importance in the region. The ambition to create a Kuala Lumpur-based exploration hub signals a long-term commitment to regional leadership, facilitating closer collaboration with Petronas and other regional stakeholders as TotalEnergies deepens its footprint across ASEAN. The company’s strategy blends a robust gas and LNG platform with a growing electricity business, designed to deliver stable cash flows, diversify revenue streams, and position TotalEnergies as a reliable partner for energy security and energy transition in Asia.

The leadership, led by Patrick Pouyanné, emphasizes a pragmatic, rules-based approach to governance, a commitment to sustainable value creation, and a recognition that Asia represents a central growth engine for the company’s energy portfolio. By pursuing targeted acquisitions, strategic partnerships, and large-scale cross-border projects, TotalEnergies aims to transform Malaysia into a regional hub that can support gas development, LNG capacity, and electricity deployment across the ASEAN region. The regulatory environment in Sarawak and the wider Malaysian context will continue to shape the pace and scope of these efforts, but the company’s track record of navigating complex markets, its close collaboration with local partners, and its two-pillar strategy for LNG and electricity position it well to capitalize on Asia’s growing energy demand. In the longer term, CCS and other decarbonization technologies will likely play a key role in TotalEnergies’ regional portfolio as the company seeks to maintain profitability while contributing to a lower-carbon energy future for Asia and the broader world.