KUALA LUMPUR: With Brent crude prices hovering around US$65 per barrel and expectations that this modest environment will linger, Petroliam Nasional Bhd (PETRONAS) is rethinking how it runs its business.
For the national oil company, the challenge is as much about efficiency as it is about endurance – sustaining liquidity, funding long-term capital expenditure, and meeting hefty dividend commitments to the federal government.
Executive vice-president and chief executive officer of upstream business Mohd Jukris Abdul Wahab made it clear that the company’s survival and competitiveness depend on more than incremental changes.
“Looking at the outlook of the price today, it is hovering around US$64–US$65 per barrel. We expect the outlook could remain at this level for quite some time,” he said during an editors’ briefing here yesterday.
“One of the things that we are currently doing is to review our operational efficiencies and cost efficiencies. The way we have done things over the past 50 years may not necessarily keep us competitive in the years ahead,” he added.
That review is reaching into the very core of how PETRONAS operates.
No stone is left unturned – from maintenance schedules and field operations to logistics, procurement, and the way offshore and onshore facilities are managed.
“Can we do this at a lower cost? Can we do this faster than what we did before? Can we cut the time by half?”
These are the questions currently being asked, Mohd Jukris explained, signalling a willingness to dismantle decades-old processes if they no longer give the company a competitive edge.
Global supply chain disruptions, exacerbated by tariff impositions, have added urgency to this exercise.
“We can’t be telling people not to impose tariffs on us – it’s impossible,” he said.
“The only thing that we can do is to respond internally... Some fundamental changes have to happen in terms of how we do things,” he added.
Mohd Jukris pointed out that while PETRONAS remains a national oil company, it acts and competes like an international oil company (IOC).
“We have come a long way and can stand shoulder-to-shoulder with other IOCs. But to stay relevant, we must continue to review and reshape our portfolio, like other major players in the industry,” he said.
For PETRONAS, every efficiency gained directly strengthens its financial resilience and its ability to invest for the future.
Mohd Jukris added that PETRONAS regularly subjects its global assets to rigorous tests, requiring a break-even oil price of US$50 per barrel or less and a unit production cost below US$6.
Assets that fail to meet these parameters face difficult questions about their place in the portfolio.
This approach has already led to significant changes, including the sale of gas assets in Azerbaijan and the scaling back of operations in Mexico, where PETRONAS exited eight offshore exploration blocks.
He emphasised that partnerships play a crucial role in this recalibration.
“Partnerships bring not only capital but also new operating philosophies and standards,” Mohd Jukris said.
He said collaborating with operators who can manage certain assets more efficiently is one of the best ways to unlock value.
“We have to bring partners to collaborate with us. Make sure that the partners take some of the risk. In this industry, we can’t operate in isolation.”
He added that these strategic alliances not only help advance energy innovation but also strengthen PETRONAS’ competitive edge while creating new growth opportunities for local energy players.
“With our CCS (carbon capture and storage) hubs gaining momentum, we are unlocking even greater potential for Malaysian businesses to lead in energy transition.
“This is how we are powering progress – building a sustainable energy ecosystem that benefits Malaysia and beyond.”
Even as it trims and streamlines, PETRONAS is keeping an eye on strategic growth opportunities.
Canada has become a central pillar in its liquefied natural gas (LNG) ambitions, with 50 trillion cu ft (TCF) of gas reserves.
“We are very keen on expanding our presence in Canada, as opposed to the news that we are leaving the country.
“With 50 TCF (of gas reserves), we can support several more LNG projects as the resource size is not the issue,” he added.
PETRONAS is a major equity partner in LNG Canada, which has a US$40bil (RM169.38bil) LNG facility and is involved in the North Montney joint venture upstream gas project.
He also noted good progress in Suriname and other markets.
“We have entered into joint study agreements in Indonesia, Vietnam, Turkmenistan and Oman.
“These are some of the work that we are currently doing to make sure that the funnel will always be filled by (new) exploration discoveries,” he explained.
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For Mohd Jukris, the review exercise also aims to position PETRONAS for an energy market expected to be more complex, competitive and volatile by 2035.
“We have to be cognisant of what is happening around us, namely geopolitics, jurisdictional changes, shifting policies, and global conflicts,” he said.
“The future is going to be very complex and challenging. We need to ask ourselves how we want to position PETRONAS.
“We have to meet the targets that we set for ourselves over the next 10 years. It is then that the portfolio is going to be ready for transformation,” he added.
Mohd Jukris shared that PETRONAS is embarking on an ambitious expansion that will grow its international portfolio by 60% over the next decade, building on its existing 40% to 50% global presence.
He added that from its first platform in Kertih to its growing ventures in Canada and other international markets, this global network serves as a powerful engine for progress.
“Malaysia remains a core part of our investment portfolio and we are committed to this market. Our recent successful discoveries in Peninsular Malaysia further reinforce our long-term strategy and confidence in the region,” Mohd Jukris said.
