During his visit to the Maldives, Malaysian Prime Minister Anwar Ibrahim announced that Malaysia is considering the Maldives’ oil exploration proposal involving Petronas. The two leaders also secured a US$100 million financing facility, signed new MoUs on defence and Islamic affairs, and pledged broader economic and climate cooperation.

Malaysian Prime Minister Datuk Seri Anwar Ibrahim announced on Tuesday that he will discuss a Maldivian proposal for Malaysian national oil company Petroliam Nasional Bhd (Petronas) to examine the possibility of oil exploration in the Maldives. Speaking at a joint press conference with President Dr Mohamed Muizzu at the President’s Office in Malé, Anwar expressed strong confidence in Petronas’ global capabilities and said the national oil company already operates successfully across multiple continents.

“On the proposal to get Petronas to look at the possibility of oil exploration (in the Maldives), well, I will have to discuss this with Petronas. And I believe in the strength of Petronas throughout the world, from Canada to Turkmenistan, Sudan, Suriname, Peru and Brazil. I don’t think it’s too much of a problem to come closer here to the Maldives,” Anwar said. He added with characteristic humour that even if exploration did not yield oil, Petronas personnel could at least rest for a few days in the islands.

The remarks came on the final day of Anwar’s two-day official visit to the Maldives, his first as prime minister since taking office in November 2022. The visit, held at Muizzu’s invitation following the Maldivian president’s 2025 trip to Malaysia, focused on elevating bilateral relations that date back to the establishment of diplomatic ties in 1968. Bilateral trade stood at RM792 million in 2025, making the Maldives one of Malaysia’s key partners in South Asia.

Financial Support and Soft Loan Facility

A major outcome of the talks was Malaysia’s agreement in principle to provide a US$100 million financing facility requested by the Maldives Monetary Authority. Anwar described it as essentially a soft loan to be channelled through Bank Negara Malaysia and the Maldivian central bank. Details of the terms and mechanism are still being finalised by the two monetary authorities, but Anwar said Malaysia had no principled objection given the Maldives’ repayment record, existing cooperation and the required government guarantee. He urged both central banks to finalise the arrangements as quickly as possible on the basis of trust and friendship.

Anwar also addressed practical issues affecting Maldivians in Malaysia. He pledged to raise at the next cabinet meeting concerns about parents of Maldivian students struggling to obtain visas, describing the problem as bureaucratic rather than a matter of policy. He similarly undertook to examine challenges faced by Maldivians seeking medical treatment in Malaysia.

New Agreements on Defence and Islamic Affairs

The leaders witnessed the exchange of two memoranda of understanding covering defence cooperation and Islamic affairs. The defence MoU emphasises maritime security and training, reflecting the Maldives’ status as a maritime nation for which sea safety is a core priority. The Islamic affairs agreement opens avenues for collaboration on halal standards, waqf, hajj, dakwah and related Muslim affairs.

President Muizzu welcomed the agreements, saying they opened practical new channels of cooperation while strengthening the institutional foundations of the bilateral relationship. Both sides also agreed to begin negotiations on a Preferential Trade Agreement aimed at expanding commercial opportunities for businesses in both countries. Muizzu encouraged Malaysian investment in renewable energy, digital infrastructure, construction and Islamic finance.

Climate Cooperation and Joint Commission Plans

Climate change featured prominently in the discussions. As a low-lying island nation highly vulnerable to sea-level rise, the Maldives has long prioritised climate action and financing. Anwar criticised the shortfall in climate financing commitments by developed countries and said Malaysia and the Maldives should jointly press for full implementation of earlier COP decisions. He affirmed Malaysia’s readiness to work with the Maldives on climate programmes that will require additional funding.

To drive the relationship forward, Anwar proposed convening the Malaysia-Maldives Joint Commission in Kuala Lumpur before the end of 2026. He described the commission as an important platform to resolve outstanding issues and convert the close political relationship into concrete cooperation across multiple sectors.

Context of Maldives’ Hydrocarbon Ambitions

The oil exploration proposal sits within a broader policy shift by the Muizzu administration. In late August 2026 the Maldivian Cabinet decided to establish a dedicated legal framework for the exploration and extraction of oil, gas, minerals and other non-living marine resources within the country’s maritime zones. A special bill is to be drafted to regulate permits, ownership of resources and sector management. Earlier in 2026, a presidential resolution expanded the list of permitted activities in Special Economic Zones to include oil, gas and mineral exploration.

Historical efforts have been limited. The last significant exploration activity occurred in the early 1990s when Shell conducted surveys and drilled an exploratory well that found no commercial hydrocarbons. Earlier seismic work in the 1970s also produced no discoveries. Some geological studies have identified pockmarks and potential gas-related features in the Inner Sea, but commercial viability remains unproven and environmental concerns are acute in a tourism-dependent archipelago built on coral reefs. Previous governments have approached the issue cautiously, with one former fisheries minister publicly stating that oil exploration was not viable and risked environmental and economic damage.

Pragmatic Approach to South-South Cooperation

The visit underscores a pragmatic approach to South-South cooperation between two Muslim-majority nations with complementary strengths. Malaysia offers technical expertise, financing capacity and established institutions in energy, Islamic finance and maritime affairs. The Maldives provides strategic location in the Indian Ocean, a growing tourism and services economy, and shared interests in climate resilience and Islamic cooperation. While the Petronas discussion remains at the exploratory stage, the broader package of financial support, new MoUs, trade negotiations and institutional mechanisms signals a tangible upgrading of the bilateral relationship.

Anwar concluded his programme in Malé with the joint press conference and media engagements before departing. Both leaders expressed optimism that the momentum generated during the visit would translate into sustained, mutually beneficial collaboration in the months and years ahead.