The government has been developing deep-water fields, rejuvenating old areas and introducing incentives to develop so-called marginal fields once deemed less profitable to explore in a bid to increase output as global energy use climbs.

It awarded licenses to develop two marginal fields this year, and will double that number in 2012. 

"Our production is declining so we want to find more oil to maintain that production level," Mohd. Emir Mavani, a director in charge of the energy industry at the government's Performance Management and Delivery Unit, told Reuters in an interview late on Thursday.

"What we want to do is maintain our production at 650,000 barrels per day."

Crude oil output in Southeast Asia's second-biggest oil and gas producer is seen rising 3.3 percent next year, reversing a decline in 2011, the government forecast in its economic report in October.

Oil production is expected to recover to 620,000 bpd, after an estimated 6 percent drop this year to 600,000 bpd, extending a 3.1 percent decline in 2010, according to the estimate.

Mohd. Emir said the marginal fields would be developed by joint-ventures between foreign and Malaysian companies on a risk-sharing basis.

The smaller fields typically produce about 30,000 barrels per day, he said.

Marginal oil fields "will grow, not only in Malaysia", he said. "We also have Vietnam and Indonesia who equally have this kind of opportunity."

In August, Malaysian state oil firm Petroliam Nasional Bhd. awarded the Balai Cluster marginal oil field offshore Sarawak to a venture involving Dialog Group, Australia's ROC Oil Co. and Petronas' exploration arm. 

It was the second marginal field awarded by Petronas this year after a group comprising Kencana Petroleum, SapuraCrest Petroleum and Petrofac won the Berantai marginal field in January.

Mohd. Emir is also chief executive of Malaysia Petroleum Resources Corp., which is tasked with developing the energy services sector. 

The organization aims to attract 450 million ringgit ($141 million) of investments in the oil and gas services industry next year, after beating its goal of drawing 320 million ringgit of investments this year. 

Vitol was among the companies that pledged investments in Malaysia, Mohd. Emir said.