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Petronas Q1 2017 profit more than doubles on higher oil prices
[KUALA LUMPUR] Malaysia's Petroliam Nasional Bhd more than doubled its quarterly profit from a year ago, helped by higher margins and a recovery in oil prices, but the state-owned energy firm maintained a cautious outlook for the rest of the year.
First-quarter profit at Petronas, as the company is known, totalled 10.3 billion ringgit (S$3.32 billion), compared with 4.6 billion ringgit in the corresponding quarter last year.
Revenue for the quarter ending in March rose 25 per cent from a year ago to 61.6 billion ringgit, the company said in statement on Friday. "The group continues to maintain a conservative outlook for the remainder of 2017 despite the positive results as supply and demand balances are still slow to return to a sustained equilibrium," Petronas said.
The company said it will continue to focus on its group-wide efforts to cut costs and improve efficiency.
Petronas is budgeting for an oil price of US$45 a barrel for 2017, it said in March. An official said in May that Petronas is working on an oil price assumption of US$45 to US$55 a barrel for the next three to four years.
Brent crude is currently trading above US$49 a barrel, having recovered from the near 12-year lows reached in early 2016. But a supply glut means prices are still less than half of what they were in the middle of 2014.
Petronas responded to the slump in oil prices by lowering operating expenses, cutting jobs and rolling back projects, which helped the national oil company post a higher 2016 profit.
In early 2016, Petronas said it would cut spending by 50 billion ringgit over the next four years, and lowered its dividend payout to the government to 13 billion ringgit in 2017, half of what it paid in 2015.
For the first quarter, the company cut operating expenditures to 11.1 billion ringgit from 11.4 billion.
Its capital investments during the quarter totalled 11.9 billion ringgit, down 17 per cent from the previous quarter but 6 per cent higher than the year-ago quarter.
Crude oil, condensate and natural gas production volumes rose to 2.39 million barrels of oil equivalent per day (boepd) during the quarter, down from 2.45 million boepd a year ago, the company said.
Malaysia relies on its only Fortune 500 company for nearly a third of its oil and gas-related revenue. Petronas is one of the country's largest employers with a workforce of over 50,000.