Petronas perseveres through a difficult 2015

Petroliam Nasional Berhad concluded an extremely difficult 2015 with lower revenue and profit after tax (PAT) amidst a depressed oil price environment and net impairment on assets.

Petronas recorded a revenue of RM248 billion, a 25% decline compared to the same period in 2014. Its PAT and PAT excluding identified items were logged at RM21 billion and RM40 billion respectively.

The company anticipates its financial performance for 2016 to continue to be affected by the prolonged volatility in oil prices and is intensifying efforts to cushion the impact to remain competitive and sustainable.

Speaking at a press conference today, Petronas’ President and Group CEO, Datuk Wan Zulkiflee Wan Ariffin remarked that Petronas had persevered through the challenging year to remain profitable and fulfil its dividend commitment to its shareholders.

The company’s 2015 operational highlights include:

• An increase in upstream production by 3% as compared to 2014, driven by enhanced production and new production streams from Malaysia and Indonesia, and additional production from Azerbaijan.
• 64% decrease in Upstream Business’ PAT to RM19.6 billion. Non-cash impairments of RM18 billion brought this down further to RM1.6 billion for the year.
• The achievement of Greenfield first hydrocarbon from 11 fields, six of which are located in Malaysia.
• Better performance from Downstream Business, where the segment’s profit margin rose by over 50% to RM8.9 billion.
• The Pengerang Integrated Complex project is progressing as expected with the refinery and steam cracker construction on-track.

Forecasting the oil prices to remain low in 2016, Petronas has taken its cost-optimisation measures to another level to counter adverse impact to its business:“These include additional reduction in CAPEX and OPEX of RM50 billion over the next four years, starting with RM15 to RM20 billion in 2016,” said Datuk Wan Zulkiflee.

“These cuts will impact some of our capital projects. At this point, we have taken the decision to re-phase the Petronas Floating LNG 2 project, to be commissioned at a later date than originally planned,” he added.

“I am confident of our internal initiatives laid out to strategically respond to the external challenges. These will navigate Petronas securely through the current downturn, and position us in a more resilient and competitive stead for future growth,” said Datuk Wan Zulkiflee.

Edited from press release by Angharad Lock

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/29022016/petronas-perseveres-through-a-difficult-year-2613/