National oil company Petronas said today it would not increase oil and gas production, maintaining current levels despite increasing demand.

Petronas president and chief executive Hassan Marican said there would be no increase from the company's current daily output of some 720,000 barrels of oil and about 5.5 billion cubic feet of gas.

"Our policy is to maintain production at around the same level," Hassan told reporters on the sidelines of the Asia Oil and Gas Conference here.

Asked if there was a specific reason, Hassan reiterated that it was the company's policy to keep current production.

Hassan said Petronas was continuing its exploration activities off Malaysian shores in the South China Sea and developing new projects in order to meet future energy demands.

"With the new developments of oil and gas, we should be able to maintain the national production for the future and also maintain the gas production to meet domestic and energy demands," he said.

Rising cost

Hassan said Petronas will also continue its production activities in Sudan and Iran. It will expand its retail network in Indonesia and is exploring potential investments there, including the development of refineries, he said.

The Petronas chief pointed to the rising costs of oil production as a danger to energy supply, telling conference delegates that costs had shot up by an average of 50 percent over the last two years.

He said that while the impact of rising costs was inevitable, Petronas operations had not been affected yet.

"So far the impact has been manageable. We've not deferred any major projects that we are undertaking," he said.