KUALA LUMPUR – Petroliam Nasional Bhd’s (Petronas) net profit fell 29% to RM16.4 billion in the second quarter ended June 30 from RM23.0 billion in the previous corresponding period as lower oil prices weighed on the national oil company’s bottom line.
Revenue for the quarter decreased by 13% to RM 79.9 billion amid a low-price environment compared to the second quarter of 2022.
For the first six months of the year, Petronas’ net profit decreased 13% to RM40.2 billion, mainly attributable to lower average realised prices.
Its revenue fell slightly to RM170.3 billion from RM170.4 billion year-on-year.
Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz said the group has resolutely progressed in its initiatives to sustain business performance despite contending with a volatile price environment in the first half of the year.
He added that these efforts emphasised operational and commercial excellence across Petronas’ value chain, sustaining upstream production and fulfilling the commitments to provide reliable energy to customers.
“Looking ahead, we expect to face increasingly difficult headwinds, including a bearish energy market for the rest of the year on the back of slowing global economic activity.
"Despite the near-term challenges, we will continue to focus on future-proofing the organisation for the long term.
“This will mean scaling up investments in our core business, even as we lower emissions while investing in cleaner energy to ensure the robustness of the group’s portfolio, aligned to our energy transition strategy,” he said in a statement.
Taufik added that the national oil firm would double down on building resilience in order to deliver long-term sustainable value as a national oil company and grow as a global energy player.
Oil price outlook
Moving forward, Petronas expects oil and gas prices to remain volatile, influenced by persistent economic headwinds and energy security concerns.
It expects Brent crude to move between US$70 and US$80 per barrel in the next 12 months.
Meanwhile, its cash flows from operating activities in the first half of the year stood at RM 57.8 billion, lower by 7% compared to RM62.4 billion previously, in line with profits generated during the period.
Capital expenditure (capex) amounted to RM 21.4 billion, mainly attributable to upstream and gas business projects.
Domestic capex increased by 48% against the same period last year mainly for investments in the nearshore floating LNG project (ZLNG) in Sabah and the Kasawari gas field development in Sarawak
Petronas’ total assets strengthened to RM742 billion as of June 30 compared to RM 710.6 billion as of December 31, 2022.
Its shareholders’ equity increased to RM410.0 billion as of June 30 compared to RM401.6 billion as of December 31, 2022.
Petronas’ upstream business recorded a total daily production average of 2,425 thousand barrels of oil (boe) equivalent per day in the first half of 2023, comparable to 2,425 thousand boe per day recorded year-on-year.
The segment also achieved a final investment decision for 12 projects comprising nine in Malaysia and three overseas, while also making five oil and gas discoveries in five blocks off the coast of Sarawak, Malaysia.
The gas business has delivered 200 LNG cargoes from Petronas LNG Complex in Bintulu and 19 LNG cargoes from PFLNG Satu and PFLNG Dua to customers across the globe.
The segment also delivered 2,214 million standard cubic feet per day of average sales gas volume in Peninsular Malaysia.
As of the second quarter of 2023, Petronas recorded cumulative greenhouse gas emissions of 23.04 million tonnes of carbon dioxide equivalent for Malaysia operations, against 22.42 million in the second quarter of 2022.
The oil firm said this was an increase of 3% recorded for the period, mainly due to an increase in production at downstream refineries.
Overall, Petronas expects to be on target to meet near- and mid-term emissions targets, as described in its net zero plan, NZCE 2050 Pathway, delivered through existing and planned emissions reduction projects. – Bernama, August 30, 2023
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