PETRONAS maintains prudent outlook

Financial highlights (3)

PETALING JAYA: Local energy titan Petroliam Nasional Bhd (PETRONAS) recorded a profit after tax (PAT) of RM23.8bil for its first quarter ended March 31 of the financial year 2023 (1Q23), representing a small 2% year-on-year (y-o-y) growth over the corresponding three months of last year.

The result was achieved on the back of a 16% y-o-y increase in turnover to RM90.4bil, although PETRONAS also disclosed that on a quarter-on-quarter (q-o-q) basis, both PAT and revenue actually slid 2% and 15% respectively from the RM24.4bil and RM105.9bil posted for the three months ended Dec 31, 2022.

While reiterating its commitment to strengthen business activities, the group said it is maintaining a cautious outlook throughout 2023 – given the risk of continued uncertainty and volatility in its business environment – and as such is anticipating oil and gas prices to moderate, possibly lowering profitability for this year.

“We will continue to exercise prudent financial management and firm discipline in reinvesting to strengthen our business portfolio, as well as build the necessary resilience with continuous improvements in commercial and operational excellence,” it said in a statement released on its website yesterday in conjunction with the publishing of its financial results.

PETRONAS president and group chief executive Tan Sri Tengku Muhammad Taufik commented that the group’s performance in the first quarter is a mix of meeting growing energy demand while developing solutions for a lower carbon future, in spite of an increasingly complex and volatile business environment.

“Against this backdrop, PETRONAS will need to take credible actions to continue delivering sustainable value in discharging our responsibility as a national oil company even as we aspire to grow as a global energy player.

“We will remain steadfast in progressing our strategies and have now crystallised our three-pronged growth strategy into the PETRONAS Energy Transition Strategy, further demonstrating our clear ambition for a just and responsible transition,” he said.

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He reassured the group’s stakeholders that PETRONAS remains focused on value growth, hinging on prudent financial management as well as investments in strengthening its core businesses, besides expanding its business portfolio.

Upstream operations for 1Q23 saw PETRONAS recording a total daily production average of 2,497 thousand barrels of oil equivalent (BOE) per day, marginally higher than 2,456 thousand BOE per day produced in the first quarter of last year.

It attributed the increased output to higher natural gas production from Malaysia operations coupled with higher crude production from international operations.

Other notable upstream milestones include achieving final investment decisions for four brownfield projects, with three in Malaysia and one in Iraq; signing 12 production sharing contracts for the offerings marketed under Malaysia Bid Round 2022; as well as signing Heads of Agreement with SMJ Sdn Bhd (SMJSB), a company wholly owned by the Sabah State, for SMJSB’s potential interest in the Samarang PSC in February.

At the same time, for its gas division, PETRONAS reported that overall equipment effectiveness (OEE) stood at 97.3% across all business segments. It also delivered 109 liquefied natural gas (LNG) cargoes from the PETRONAS LNG Complex in Bintulu to customers across the globe.

“The gas division also completed 2,253 million standard cubic feet per day of average sales gas volume delivered in Peninsular Malaysia, while also completing 941 Virtual Pipeline System and LNG Bunkering deliveries in Malaysia to customers in remote locations and to the marine industry,” PETRONAS’ statement said.

Meanwhile, its downstream segment recorded an OEE of 88.9% for the quarter in review, during which marketing also registered sales of 6.3 billion litres, an 8.6% rise from 5.8 billion litres sold in the same period last year.

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PETRONAS said the increase in sales volume for the downstream division came from a demand growth in the domestic retail and commercial segments driven by the country’s economic recovery.

“Our chemicals segment recorded a plant utilisation of 96.1% compared with 86.6% in the same period last year. Overall production volume increased to 2.7 million tonnes while sales volume improved to 2.4 million tonnes,” it noted.

It also kept up its partnership expansion with Tiger Gas through its PETRONAS Marine brand, with its maiden ship-to-ship LNG bunkering transfer of approximately 500 tonnes of LNG to Tiger Maanshan, the world’s largest dual-fuel deck cargo ship.

Of particular interest is the group’s growth of its non-fuel business, which saw its brand Café Mesra opening seven new outlets in high-traffic locations during the quarter.

“The first standalone dining menu was unveiled at Mid Valley shopping mall in Kuala Lumpur and the first pilot café trailer at the PETRONAS Station Paka 2 in Terengganu. In the meantime, our Setel app joined the DuitNow QR ecosystem to enhance its user experience with seamless payments to over 1.6 million merchants nationwide while being rewarded with Mesra points,” PETRONAS said.

Separately, the group also reported on the progress of its subsidiaries Gentari Sdn Bhd and MISC Bhd, as milestones for the former included achieving 0.2 GW of renewable energy capacity in operations and under development, as well as completing the acquisition of Wirsol Energy, a leading renewable energy solutions provider in Australia, in February, adding 422 MW of capacity to Gentari’s overall renewables portfolio.

Gentari, meanwhile, signed memorandums of understanding with Mitsui & Co Ltd, Samsung Heavy Industries and Andritz AG, respectively, in January to explore opportunities for carbon capture and storage solutions in the maritime value chain.

The clean energy entity also welcomed two new-generation LNG carriers, with both vessels equipped with sustainable technologies.

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