By Khairul Khalid
The overall outlook for the oil & gas industry is currently not very rosy due to the low prices of crude oil, said Petronas president and group CEO Wan Zulkiflee Wan Ariffin.
Wan Zulkiflee Wan Ariffin
“The industry is still grappling with issues caused by the plummet of oil prices since last year,” said Wan Zulkiflee.
Nevertheless, Wan Zulkiflee is optimistic that there are opportunities and silver linings within the current tough climate.
“What doesn’t kill you makes you stronger. We shouldn’t dwell on all the doom and gloom or we will get nowhere,” said Wan Zulkiflee.
The CEO says that the some of the key areas for Petronas will be proritising its key projects and diligently pushing its big ticket investments.
These large projects include the RM60 billion RAPID (Refinery and Petrochemical Integrated Development) project in Johor, the RM100 billion LNG (liquefied natural gas) project in Canada, RM8 billion acquisition of oil & gas assets in Azerbaijan as well as its FLNG (floating liquefied natural gas) facilities.
“Petronas will continue to invest along the value chain to ensure business sustainability,” said Wan Zulkiflee.
Wan Zulkiflee also stressed the importance of cost reduction, management and improving efficiency.
“There is a need to heighten efficiencies. The current situation calls for more discipline. We have to manage new realities to adapt to the new normal,” said Wan Zulkiflee.
He also said that deploying cost efficient new technology is also important.
“Breakaway new technology can be worth the bet. We need not just the firepower but the right ammunition. For Petronas, technology will be a key differentiating factor,” said Wan Zulkiflee.
The Petronas CEO also advocates an industry consolidation through mergers and acquisitions as well as strategic collaborations between resource owners, operators and service providers.
Crude oil prices have plunged from over US$100 per barrel last year to around US$65 currently.
“We will see many years to see crude oil price reach those levels again. We have under-estimated the resilience of US shale production,” said Wan Zulkiflee.
The proliferation of unconventional oil & gas production, especially US shale, was one of the major causes of the supply glut forcing oil prices down.
Many industry observers had predicted that low oil prices would force US shale producers to shut down, bringing prices back up near to previous levels again.
Wan Zulkiflee was a panel speaker at the “CEO Strategic Dialogue” session at the 18th Asia Oil & Gas Conference in Kuala Lumpur today, hosted by Petronas. The event was launched by Prime Minster Najib Abdul Razak earlier.
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