KUALA LUMPUR: Petronas Gas Bhd has an optimistic outlook for the rest of 2006, saying it expects demand for gas to continue growing in line with the nation's forecast growth of 6%.
Chairman Tan Sri Mohd Hassan Marican said the company would continue to implement improvement initiatives to maintain its operational and financial performance.
The initiatives saw Petronas Gas improve its net profit by 18% for the financial year ended March 31 to RM971mil on the back of close to RM2.84bil revenue.
Hassan told a media conference after Petronas Gas' AGM yesterday that to be a recognised player in the global oil and gas industry, the company needed to be aware and open to all opportunities, especially offshore.
On its parent Petroliam Nasional Bhd (Petronas) acquiring a US$1.1bil stake in Russia's Rosneft, he said the move was to ensure Petronas continued to grow as a global player.
“Serious oil and gas players cannot afford to ignore Russia because it is a huge oil producer situated between the East and the West.
“The Rosneft deal was the logical thing to do and we would not rule out a stake increase if opportunity arises,” Hassan said.
He said Petronas Gas, together with Petronas, had been monitoring Russia and building relationships with the country for some time, seeking new opportunities for investment.
Russian investment also provided geographical risk diversification, with Petronas already having operations in Africa and West Asia, he added.
Overseas operations and exports contributed 78% of Petronas Gas' revenue last year, he said, adding that the smaller size of the Malaysian market made it a must for the company to go global.
“We would also continue to focus on Africa, both in the countries that we are planning to go as well as countries we are already in, such as South Africa and Sudan,” he said.
Without elaborating on its future ventures, Hassan said overseas business made up about 38% of Petronas Gas' total operations.
For the year ended March 31, its overseas operations contributed RM56.6bil to Petronas' revenue of RM166.9bil.
On the local front, Petronas Gas recently secured a contract to operate the 480km gas pipeline from Kimanis in Sabah to Bintulu in Sarawak, which it hoped would be ready by 2010.
OSK Securities oil and gas analyst Chris Eng said this contract would bode well for Petronas Gas.
“It means Petronas Gas would get to build the pipeline as well as rent it to Petronas for the transfer of gas in east Malaysia, similar to the arrangement in the peninsula now,” Eng told StarBiz.
He said having the contract also meant that part of the company's revenue had already been secured, going forward.