Petronas Gas Bhd edged 0.23% higher to RM17.62 as of 4.12 pm today, with 244,900 shares traded, as the outlook for higher domestic oil and gas spending by Petroliam Nasional Bhd (Petronas) from 2027 provides a potential catalyst for the sector.
The stock opened at RM17.76 and traded between a high of RM17.76 and a low of RM17.56, compared with its previous close of RM17.58.
The movement comes as analysts expect Petronas’ upstream activity to recover from 2027 after a subdued period for spending on existing operations.
Kenanga Research said the upstream oil and gas services sector could be approaching the bottom of its current cycle in the second half of 2026, before entering an upcycle from 2027. It maintained an OVERWEIGHT call on the sector.
The research house expects Petronas’ ongoing upstream portfolio restructuring, including greater foreign participation and farm-out arrangements, to eventually support higher activity as assets gain access to additional funding.
CIMB Securities has also maintained its OVERWEIGHT stance on the oil and gas sector, saying sustained higher oil prices could improve the economics of upstream development projects and encourage Petronas to accelerate domestic spending.
CIMB expects Brent crude to average US$80 per barrel in the first half of 2027.
Petronas recorded RM47.5 billion in operating cash flow in 1H26, while overall capital investment rose sharply to RM41.4 billion, although a substantial portion was linked to its investment in PRefChem.
Excluding the additional investment in the PRefChem joint venture, CIMB said underlying spending was considerably steadier, with purchases of property, plant and equipment and intangible assets broadly unchanged at RM16.8 billion.
Kenanga similarly estimated that only RM15.4 billion of Petronas’ first-half capital expenditure was spent on its existing businesses after accounting for around RM26 billion attributed to the PRefChem transaction.
For Petronas Gas, stronger domestic gas demand could provide an additional tailwind. Kenanga noted that Malaysia’s average sales gas volume increased by 342 million standard cubic feet per day, driven mainly by higher offtake from the power sector, which could point to strong underlying industrial and data centre-related demand.
CIMB also reported Malaysian sales-gas volumes increased 12.4% year-on-year to 3,111 million standard cubic feet per day in 1H26.
While the near-term outlook for upstream services remains soft, both research houses see improving prospects from 2027 as Petronas’ spending cycle potentially turns higher.
