The supply of Malaysia's flagship crude grade Kimanis will be halved in May and June due to weak demand and as the country has agreed to reduce production in a pact with major oil producers, two sources familiar with the matter told Reuters on Wednesday.

Kimanis is produced from the deepwater fields of Gumusut-Kakap and Malikai offshore Sabah, which are operated by Royal Dutch Shell.

Production at these oilfields will be reduced, said one of the sources.

For May, the number of Kimanis crude cargoes will be reduced to four, down from eight cargoes in a provisional loading programme seen by Reuters last month, the sources said.

ConocoPhilips will market two of the cargoes, while Petronas and Shell will each market one.

For June, five Kimanis cargoes will be lifted, the sources said: Petronas will market three, loading June 6-10, June 11-15 and June 16-20; ConocoPhilips will market the fourth, loading June 21-25; while Shell has the fifth, loading June 26-30.

Normally around 10 Kimanis cargoes are loaded each month.

Shell declined to comment. Petronas did not immediately comment.

Malaysia is part of Opec plus, a grouping of the Organization of the Petroleum Exporting Countries (Opec) and its allies including Russia, which have agreed to reduce production by 9.7 million barrels per day from May 1 to ease a global supply glut amid the coronavirus pandemic.

Malaysia has agreed to cut its crude oil production by 136,000 bpd for May and June despite being a small producer and net importer of oil, its minister in charge of economic affairs said last week.

Last month, May-loading Kimanis crude was traded at a spot premium of around US$4-US$4.5 a barrel above dated Brent, two Singapore-based oil traders said. But it has since come under pressure from falling demand due to strict measures by many governments measures to limit people's movement to contain the virus' spread.

- Reuters