Petronas : Petroliam Nasional Bhd Sees Challenging Year

The Star : Petroliam Nasional Bhd (Petronas) said the outlook for the rest of its financial year 2012 (FY12) will be challenging amid geopolitical problems in Sudan where it has presence and the unfavourable economic situation in the eurozone economies and the United States.

Petronas’ net profit for the second quarter ended June 30 dived 29.9% year-on-year to RM15.22bil from RM21.71bil while second quarter revenue fell at a slower pace of 3% to RM70.7bil from RM72.94bil.  President and chief executive officer Tan Sri Shamsul Azhar Abbas said the renewed economic crisis in Europe and possibly the United States could put downward pressure on oil prices.

“We are now in the third quarter, it is going to be worse off. Why? It is very simple, lower profits will be due to (issues) in Sudan.

“Now in the South (Sudan) we are seeing zero production. It is reflected in the second quarter and the worse is going to happen in the third and fourth quarters,” he said at a briefing.

“For the next six months, we expect zero production out of Sudan and what is the impact on our bottomline? It is about US$1bil (RM3.11bil) a year. We are also impacted by gas production in Turkmenistan,” he said.

Locally, Shamsul said oil production in Malaysia “will remain a challenge” until 2014 mainly because of depletion of reserves.

“It is only from 2014 onwards, with the completion of new oilfields that (comes) onstream (such as) the Gemusut Kakap. For the next couple of years until 2014, please expect production in Malaysia to remain challenging as far as Petronas is concerned,” he said.

Executive vice-president (finance) Datuk George Ratilal said the price of oil for the second quarter fell compared to an uptrend in the first quarter of financial year 2012.

“The price of oil for the relevant quarter from April to June 12 basically took a dive from US$134 to US$103 per barrel for the Tapis (type). For Dated Brent, (it dropped) down from US$125 to about US$94 per barrel but in between that period it also came down to as low as US$88,” he said.

George said Petronas’ healthy financials highlighted that it would need to spend on capital expenditure (capex) moving forward although it had been able to sustain this with internal funds.

“Going forward, the caution is that (internal) operations’ cash may not be enough to sustain capex and dividends.

“Cash, while it is healthy here, it will be needed to sustain any deficits in (internal) operations cash you will see a decline in cash, moving forward,” George said in his presentation. [Source : The Star Online]