Malaysia’s state oil firm Petroliam Nasional Berhad will focus on strengthening its capital position to deal with increasing volatility in the energy market and “restrictive” access to financing, its chief executive said on Wednesday.
Petronas, as the company is known, posted a 29% drop in second-quarter profit, in line with other oil majors such as Chevron, Exxon Mobil, Shell, as energy prices fell from highs hit following Russia’s invasion of Ukraine a year and a half ago.
Petronas Chief Executive Officer Tengku Muhammad Taufik Tengku Aziz said oil and gas prices will continue to remain volatile amid what he called an “uncompromisingly uncertain” macro environment. He expects Brent crude to trade between $70 and $80 per barrel for the rest of the year, lower than Wednesday’s price of around $86.
“It has become evidently clear that in order to address the headwinds in the near term and the structural changes in the long term, we must have more funds and liquidity available on hand,” he said at a press conference.
The CEO said access to external financing was getting increasingly difficult due to financial institutions prioritising sustainable projects, forcing Petronas to rethink its capital strategy and build its cash reserves for growth.
Petronas – the world’s fourth-biggest LNG exporter – will increase investments in its core business, even as it aims to lower emissions and invests in cleaner energy, he said.
The company’s profit for the April-June period totalled 16.4 billion ringgit ($3.53 billion), compared with 23 billion ringgit in the same quarter last year. Revenue fell 13.4% to 79.9 billion ringgit.
Petronas said it will pay a dividend of 40 billion ringgit this year to the Malaysian government, its sole shareholder, compared with 50 billion ringgit last year.
(Reporting by A. Ananthalakshmi; Editing by Kanupriya Kapoor)