Petronas outlines six strategies to remain profitable

Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has outlined six strategies to tide over the trying times in the oil and gas (O&G) industry, and to stay profitable.

Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin told an English daily that in the next few years, the company should focus firstly on cash generation.

"What I mean by cash generation is our plants must be in tip-top condition - running all the time - and we must sell our products at the best value we can get, so it has to be all across the value chain," he said.

Second, Zulkiflee said Petronas needs to deliver on its growth projects - the Refinery and Petrochemical Integrated Development (RAPID), the Floating Liquefied Natural Gas (FLNG), more projects in Sabah and the project in Canada.

"We need to deliver these projects well - no cost overruns, and on time and with good health and safety levels," he said.

He said the O&G projects that have already been sanctioned will go ahead, but the company would also ask for re-bidding for some of the packages in the RAPID project to reflect the lower prices of raw materials.

Striking down costs and simplification is the third strategy.

"We are reviewing some of the processes across the group. These include human resource, procurement and planning processes.
 
"If we are able to simplify and reduce man hours, the man hours saved can instead be allocated for cash generation. These will be our short-term measures," Zulkiflee said.

Investing in technology, better talent management and improved work culture were the three other measures cited by Wan Zulkiflee.

Zulkiflee, a 32-year veteran of Petronas, said the current tumultuous time provides a good window of opportunity to address all the inefficiencies within the organisation and also the Malaysian O&G industry.

He also said Petronas, with a 51,000-strong workforce, has no immediate plan to lay off staff, with some having been redeployed to the RAPID project. - Bernama