By Khairul Khalid
National oil company Petronas (Petroliam Nasional Bhd) has posted revenue of RM84 billion and profit before tax of RM27.2 in the first quarter of financial year 2014 (1Q14), according to the company in a media briefing today.
Petronas’ revenue is up 10% compared to RM76.7 billion in the same period of the previous financial year 2013 although profit before tax fell slightly by 6% in the same corresponding period. Profit after tax for 1Q14 slightly decreased to RM18.8 billion compared to the same period in 2013.
“The strong performance of 1Q14 revenue came from higher petroleum products trading volume on the back of stronger demand from customers, higher processed gas sales volume driven by higher gas supply from the importation of LNG via the regasification terminal in Melaka, higher oil and gas production volume mainly due to production resumption in South Sudan and new producing fields from Iraq,” said Petronas president and group chief executive officer (CEO) Shamsul Azhar Abbas.
Shamsul also cites the effects of a favourable US dollar exchange rate against the ringgit as a key factor that boosted revenue. Asked about reports of Sarawak’s recent demand for an increase in oil royalty from 5% to 20%, Shamsul confirmed that there has been a request but final decision in this matter is up to the federal government, and not Petronas.
The Petronas CEO is also optimistic that it is constantly on the lookout for more partners to divest its stake in its investments in Canada.
Recently, (Petronas) announced the sale of 15% of its Canadian shale assets in British Columbia to China Petrochemical Corp (Sinopec). It had purchased Canada’s Progress Energy for RM19 billion (US$6 billion) in 2012.
After the sale, Petronas will hold a 62% stake in the Pacific NorthWest LNG project. Other than Sinopec, Petronas has sold its stake to Indian Oil Corp Ltd, Japan Petroleum Exploration and Petroleum Brunei. Petronas is targeting to reduce its stake in the project to as low as 50%.
Recently it was also reported that Petronas has agreed to a RM89 billion (C$30 billion) liquefied natural gas (LNG) investment in British Columbia.
Shamsul Azhar Abas
Shamsul states that the bulk of output from Petronas’s Canadian gas projects will be sold for the export markets and not for local consumption. He explains that there local production is enough to cater for Malaysian requirements.
On the other hand, Petronas’s profit before tax for 1Q14 decreased by RM1.6 billion, primarily due to higher operating expenses such as depreciation, amortisation and impairment expenses, negated by favourable US Dollar exchange rate movement against the Ringgit.
Petronas’ total assets increased to RM531.3 billion as at 31 March 2014 compared to RM528.7 billion as at 31 December 2013 primarily as a result of profits generated during the 1Q14.
The company’s shareholders equity for 1Q14 is RM349.5 billion, an increase by RM13.7 billion compared to 31 December 2013 mainly due to the impact of profits generated during the period.
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