Published on the 15/10/2026 | Written by Heather Wright

Energy giant slashes apps before chasing AI…

When energy giant Petronas was preparing for the AI era it deleted half its apps.

While much of the corporate world is busy bolting AI onto already cluttered technology estates, Petronas took a different approach, grabbing the pruning shares and decommissioning 50 percent of its apps. The discipline saw the Malaysian energy giant slash tech costs and embed a value framework designed to stop projects before they became expensive digital clutter. It also formed the beginning of a three stage journey to being digital.

“We poured a lot of money into IoT, analytics and stuff like that, but all it could do is just predict a machinery failure better.”

Shaharuddin Mustapha, Petronas Digital chief executive officer, admits the company is still only in the second ‘horizon’ of its plan: digitally enabled but still on the path to the ‘AI era’ and ‘being digital’.

Learning to say no

Speaking at Gartner’s IT Symposium on the Gold Coast recently, Mustafa compared the job of a modern digital leader to a game of Minesweeper – but Minesweeper where someone else is moving the mines, changing the grid and rewriting the rules while you’re asleep.

For Petronas, the challenge is bigger than technology.

The company operates in an industry where energy security, geopolitics, regulation, resilience and sovereignty can affect decisions as much as software architecture. Technology leaders can no longer focus solely on technical risk, he says. They must be able to explain risk in business terms, understand the value being pursued and decide how much control they are prepared to relinquish to vendors, governments and partners.

The changing environment led Petronas to a simple conclusion: Not every technology request deserves a yes.

“One of the principles that we put in was that the IT or digital organisation needs to have the ability to say no,” Mustafa says.

That’s not always an easy sell.

Before taking over Petronas Digital two years ago, Mustafa worked in the business itself, pushing for more capability, more investment and faster delivery.

“I was one of those people,” he admits. “I have the budget, just go do it. I want the cheap, good, fast.”

Then he moved to the other side of the table.

Suddenly, the reality of finite resources became impossible to ignore.

“We can’t do everything,” he says. “We cannot fulfil every single order.

The company responded by introducing an enterprise value framework to assess proposed initiatives. The key question became straightforward: what value will this create?

If the answer wasn’t compelling enough, the project didn’t proceed.

“We say no when the initiative creates no value,” Mustafa says.

Technology teams saying “no” was initially a shock to parts of the organisation, but Petronas sees that discipline as essential preparation for the next phase of transformation.

“The ability to say no is also a means for us to clean up our ecosystem,” he said.

That clean-up was the decommissioning of half of its applications because they were no longer needed. The company also undertook an extensive ‘cost compression’ program that reduced tech spend by around 20 percent, not through a major transformation program but by eliminating unnecessary services and negotiating more fit-for-purpose arrangements.

“We just took stuff out that we didn’t need,” he says.

The struggle for enterprise-wide value

Mustafa says the company is now in its digitally enabled stage. “A lot of platformisation happened here with the ERP, procurement systems and all that.”

Mustafa says Petronas invested heavily in cloud, cybersecurity, IoT and analytics long before today’s AI boom. But he’s open: Some initiatives delivered strong outcomes. Others generated isolated benefits that never translated into enterprise-wide value.

Case in point: Predictive maintenance. While the technology improved the ability to predict machinery failures, scaling that capability into broader economic value proved more difficult.

“We poured a lot of money into IoT, analytics and stuff like that, but all it could do is just predict a machinery failure better.” It never got to the point of scaling it the economic PNL of an asset.

On the flip side, one success story was optimisation of Petronas’ end-to-end liquified natural gas value chain, which consistently delivered results because it improved multiple parts of the business simultaneously, from production through to shipping and customer delivery.

“We’ve had the data coming in from the upstream production, sequenced to the onshore LNG liquefaction plants and then sequenced to the shipping, the marketing, and creative people to the end customer.”

Other cases, such as the predictive maintenance, were very task and use case based and couldn’t scale much beyond the initial use case.

“There have been many cases of value, but we haven’t got one that really scales up and is really pervasive,” he says.

The company is now looking – cautiously – at the value agents and AI can provide. “

We want to solve things in terms of the value of autonomy as opposed to the value of automation,” Mustafa says.

From manpower to outcomes

The company has also restructured how it delivers technology projects.

Petronas moved away from buying project manpower and shifted to outcome-based delivery models, forcing teams to define expected business value, workflows, data requirements and outcomes before work begins. According to Mustafa, the approach delivered an immediate reduction of around 30 percent in development costs.

The philosophy reflects the same underlying principle that drove the application clean-up: Technology should be judged on value, not activity.

For Australian and New Zealand CIOs facing mounting pressure to demonstrate AI progress, that may be the most important lesson from Petronas’ experience. The company is not arguing against AI. In fact, it sees significant potential in the next wave of autonomous systems. But before organisations start building an AI future, Mustafa’s message is clear: figure out which parts of the old technology estate deserve to come with you.

Sometimes the smartest technology investment isn’t a new platform. It’s hitting delete.