05/12/2007 (Channel News Asia), Kuala Lumpur - Malaysia's state oil firm Petronas is considering developing biofuels in view of the growing popularity of the renewable energy source, a report said Wednesday.

"We are not ruling out exploring biofuels," said Zamri Jusoh, senior manager of Petronas' petroleum development management unit, according to the Edge Financial Daily.

"Of course our focus is on oil and gas, but I think as we move into the future we cannot ignore the importance of biofuels," he was quoted as saying.

Petronas is repositioning its research and development division to look at alternative energy sources, he added.

Malaysia is planning to make palm oil-based biodiesel development a national policy as it seeks to tap the booming biofuel market and reduce its reliance on fossil fuels.

Last week, the crude palm oil (CPO) futures contract for February delivery hit an all-time high of 3,068 ringgit when crude oil prices traded close to the 100 US dollar per barrel mark.

CPO prices have tracked price movements in the oil market closely, as high energy costs boosts the feasibility of biofuel development. - AFP/ac