Azizan told the fourth Asian Oil & Gas conference that small oil companies will find it difficult to compete against bigger rivals if mergers among large oil companies create more-efficient entities. He was referring to the proposed merger between Exxon Corp and Mobil Corp of the US, a deal that would create the world's largest investor-owned oil company.

Azizan also denied speculation that Petronas wants to acquire a stake in Malaysian Airline System Bhd, the debt-laden national carrier. Meanwhile, Petronas remains in negotiations to buy a controlling stake in Malaysia's national car maker, Perusahaan Otomobil Nasional Bhd, or Proton, Azizan said. Separately, he said Petronas will consider raising funds in the international bound market if conditions are favorable.Last week, Malaysia launched a $1billion global bond issue, which was oversubscribed.