State-owned oil firm Petronas reported on Friday a US$2 billion quarterly loss and a planned cut in spending over the next two years, hit by a slump in global oil prices.
Petronas posted a net loss of RM7.3 billion in October-December 2014 compared to a profit of RM12.8 billion in the same period in 2013. The loss, which Petronas’s CEO said was its first quarterly loss in at least five years, was also caused by impairment charges.
The company announced plans to cut capital expenditure by 10% and operating expenses by up to 30% this year. The 2016 capital expenditure would also be trimmed by 15%, it said.
“Since we began reporting our quarterly earnings five years ago, in my memory we have never reported a quarterly loss,” outgoing Petronas chief executive Shamsul Azhar Abbas said at a press conference to announce the results.
Malaysia, a net energy exporter, relies heavily on Petronas for most of its oil and gas revenue. But weaker global oil prices have dented its income, and left the Southeast Asian nation faced with a devalued currency and risk of a sovereign downgrade due to mounting debt from its struggling state fund 1MDB.
Unlisted Petronas said government payments in the form of dividends would be about RM26 billion in 2015. It had said in November that government dividend would be 37% lower in 2015 if oil stays at US$75 a barrel.
Brent rebounded to US$61 a barrel on Friday, on hopes of better oil demand, after slumping to as low as nearly US$45 in January. Between June and January, crude oil prices had crashed 60%.
Shamsul said the company sees crude oil prices averaging US$55 a barrel in 2015.
“This current scenario of $50-$60 band is going to be there over the next at least two years. We are going to do a midterm review of this budget and come up with a revised number in the month of May or early June to come up with what possible new numbers there are,” he said.
Petronas has appointed former chief operating officer Wan Zulkiflee Wan Ariffin as its new president and chief executive effective April, replacing Shamsul.
Under the helm of Shamsul, the country’s only Fortune 500 company has expanded abroad to shore up future earnings as output slows at home. It bought Canada’s Progress Energy Resources in 2012 in a deal worth around US$5 billion that gave it shale gas properties in northeastern British Columbia. – Reuters, February 27, 2015.