Petronas officials had said previously that with crude oil prices still far below the US$100 per barrel seen during the industry’s heyday several years ago, the development of marginal oilfields no longer made economic sense, given its high breakeven cost of production.

“The breakeven price was just above US$60 for the marginal oilfields to be economically viable,” said an industry official.

In a statement yesterday, Petronas said the cessation of the RSC would allow it to minimise the project’s long-term value erosion and optimise the development and production activities in Malaysia in line with efforts to reduce costs and increase efficiency.