Rapid project delayed

  • Business
  • Thursday, 06 Jun 2013


KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) hopes to reach a final investment decision on its RM60bil Refinery and Petrochemicals Integrated Development (Rapid) complex in Pengerang, Johor by the first quarter of next year, pushing back the commissioning of the specialty chemicals-based facility to end-2016 or early 2017.

This was because of a delay in the state government’s relocation of residents as well as cemeteries, president and CEO Tan Sri Shamsul Azhar Abbas told journalists at a briefing on Petronas’ first quarter results yesterday.

Water supply has also been an issue, he added.

Nonetheless, Shamsul said the national oil company’s five-year RM300bil capital expenditure plan to reverse declining production was intact, noting that it would have to play catch-up after having spent only RM72bil, or 24%, of that amount between 2011 and January this year.

According to its financial statements, Petronas posted a 2.73% decrease in net profit for the three months to March to RM20.37bil from RM20.94bil a year ago, citing lower crude oil prices and higher costs.

Excluding non-operating costs, Petronas said its net operating profit after tax would have improved by RM1.2bil.

Its revenue during the period rose 1.89% to RM76.68bil against RM75.25bil on higher trading volume from both crude oil and sales gas, buoyed by customer demand and the strengthening of the US dollar to the ringgit.

The state-owned firm achieved total production of 2.16 million barrels of oil equivalent per day (boe) compared with 2.11 million boe in the same quarter of last year and 2.08 million boe in the final quarter of 2012.

Its gross margin stood at 40.7% as at March, lower than 44.6% in the previous corresponding period but a substantial improvement over 29.6% in the three months to December.

The oil and gas firm’s gearing level inched down to 11.6% from 11.7% as at December, while return on average capital employed edged higher to 17.6% versus 17.2%.

Its cash reserves climbed some 4% to RM145.1bil.

In terms of its main segments, E&P was the best performer by earnings at RM11.41bil, followed by gas and power at RM5.04bil and downstream at RM2.11bil.

Turnover-wise, its downstream arm was No. 1 at RM36.76bil, followed by E&P at RM30.22bil and gas and power at RM23.19bil.

On its operations abroad, Shamsul said production at Petronas’ Canada shale gas fields was expected double next year from the current 51,000 boe.

He added that production in South Sudan, where work was halted for 15 months since January last year due to disagreements between the then newly-separated North and South Sudan over oil pipeline charges, could return to 120,000 boe by mid-2014.

Petronas’ Sudan facilities resumed operations in April, with daily production of 200 barrels currently. Its first commercial cargo is expected port side by this month. The African country’s contribution in 2013 is, however, expected to be marginal.

Shamsul said crude oil should hover between US$95-US$100 per barrel for the year compared with US$112 per barrel in the first quarter.

The company is likely to post a pretax profit of RM89bil for 2013, equal to last year, as an estimated 2% rise in production offsets lower crude oil prices, he added.

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