Exxon, which has headquarters in Texas, announced production started at the Damar field, which has a projected capacity of 200 million cubic feet of natural gas per day.
"Damar will help meet increasing natural gas demand in Malaysia," Neil Duffin, president of Exxon Mobil's development company, said in a statement.
The Malaysian government said it expects overall energy demand to increase.
The U.S. Energy Information Administration reports Malaysia has about 83 trillion cubic feet of proven natural gas reserves and is No. 3 in the world in terms of exports of liquefied natural gas behind Qatar and Indonesia.
Exxon said it plans 16 development wells this year at Damar with its joint venture partner Petronas Carigali, the exploration and production subsidiary of Malaysian state-owned energy company Petronas.