You are here
Petronas boosts payout to KL after Q2 profit doubles
MALAYSIAN state-owned energy firm Petroliam Nasional Berhad is looking to expand its core business portfolio and plans to pay the government a higher dividend than earlier promised, its chief executive said on Thursday.
The comments came as Petronas, as the company is known, reported a near doubling of profit in the second quarter, helped by higher oil prices.
After years of cautionary spending due to a weak energy market, Petronas is loosening its purse strings as oil and gas prices stabilise. "We will endeavour to expand our core business portfolio while exploring opportunities to step out into speciality chemicals and new energy," chief executive officer Wan Zulkiflee Wan Ariffin said at a press conference.
Petronas will continue to maintain a "prudent view on the outlook", he said.
The company, which is known to be conservative with its outlook, expects its full-year performance to be "satisfactory". Petronas is budgeting for an oil price of US$66 per barrel for next year.
Petronas will pay the Malaysian government, its sole shareholder, a dividend of RM24 billion (S$7.9 billion) this year, up from RM16 billion last year. The company had earlier expected to pay RM19 billion this year.
The higher dividend comes at a crucial time for the Malaysian government, which is relying more on Petronas - a significant contributor to government coffers and the country's largest employer - to offset a revenue shortfall from scrapping an unpopular consumption tax.
Petronas is the sole manager of Malaysia's oil and gas reserves, and is the world's third-biggest LNG exporter after Qatar and Australia.
As oil prices plunged, Petronas said in 2016 that it would slash spending by RM50 billion in the following four years. But it has been making new investments in recent months in Mexico, Senegal and Canada.
The company's upstream CEO Anuar Taib said there will be a modest increase in activity in Malaysia.
Petronas is planning capital expenditure of RM14-15 billion next year for Malaysian upstream activity, up from about RM12 billion this year, he said.
Petronas' profit for the second quarter totalled RM13.63 billion, up from RM7.06 billion a year earlier. Revenue increased 14.7 per cent to RM59.24 billion.
Production volume for the first half of the year rose to 2.383 million barrels of oil equivalent (mmboe) per day from 2.342 mmboe per day in the same period last year.
LNG sales volume for the first half dipped to 14.48 million tonnes, down by 0.21 million tonnes, mainly due to lower volume from plants, Petronas said.
CEO Wan Zulkiflee said Petronas was in talks with Malaysia's oil and gas-rich Sarawak state, which earlier this year asserted its right to its resources.
Sarawak wants to assume full regulatory authority for the upstream and downstream industries in the state - a move that would affect Petronas' operations.
Last year, the state government formed an oil and gas company, Petroleum Sarawak Bhd (Petros), and has also been demanding higher royalties from Petronas.
Mr Wan Zulkiflee said Petronas is talking with Petros about day-to-day operations, but the demand on royalties will be dealt with by the federal government, which regulates the company. REUTERS