PETALING JAYA: Petroliam Nasional Bhd (Petronas) will raise capital expenditure (capex) spending in the last quarter of the year to lift production and increase capacity.
The national oil company, in a statement, said higher price of crude oil boosted third-quarter profit before tax by 26% to RM18.87bil compared with RM14.95bil in the corresponding period last year.
Revenue rose 19% to RM63.9bil.
“The improved results are driven by ongoing operational improvement efforts throughout the group and supported by improved oil prices during the period,” president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said.
The price of Brent crude futures, the global benchmark, hit a four-year high of US$86.29 a barrel on Oct 3. The contract was traded at US$60.27 per barrel yesterday.
“The recent drop in oil prices demonstrates the volatile and cyclical nature of the industry and we will continue to maintain our prudent outlook amid this landscape while remaining steadfast in pursuing our growth strategies to ensure the long-term sustainability and progress of the company,” Wan Zulkiflee said.
The crude oil, condensate and natural gas entitlement volume for the third quarter ended Sept 30 was 1.51 million barrels of oil equivalent (boe) per day as compared with 1.67 million boe per day in the same three-month period in 2017.
Total production volume was 2.18 million boe per day as compared with 2.21 million boe per day a year ago.
Cash flow from operating activities, however, decreased 19% from a year ago due to higher working capital and taxes paid, partially offset by the higher average price realised.
“Capex spending is anticipated to increase in the fourth quarter, driven by requirements for the Pengerang Integrated Complex (PIC), LNG Canada as well as increased drilling activities both domestically and abroad,” Petronas said.
The PIC project has reached 95% progress, while Petronas announced in early October that it had approved the final investment decision for the 25% participation in the LNG Canada project.
Petronas said capital investment in the third quarter was RM6.7bil, while the total spending during the first nine months of the year was RM26.5bil.
This is 22% lower compared with the RM33.8bil in capital investment made in the first nine months of 2017.
Total assets rose to RM623.1bil as at Sept 30, compared with RM599.8bil as at the end of 2017.
Shareholders’ equity rose to RM402.1bil, mainly contributed by profit generated during the period on the back of ongoing operational improvements and better commodity prices.
As of end-September, the gearing ratio remained at 16.1%, while the return on the average capital employed increased to 12.6% in tandem with the higher profit.