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Corrected: Petronas posts 62 percent profit rise, warns on outlook
June 5, 2012 / 3:37 AM / 6 years ago

Corrected: Petronas posts 62 percent profit rise, warns on outlook

KUALA LUMPUR (Reuters) - Malaysia’s state oil firm Petroliam Nasional Bhd (Petronas) PETR.UL posted a 61.7 percent increase in first-quarter profit on Thursday, saying the rise was mainly due to higher margins and the company’s sale of its stake in Centrica Plc (CNA.L).

The unlisted company said its net profit for the three-month period ended March 31, 2012 rose to 20.7 billion ringgit ($6.5 billion) from 12.8 billion ringgit a year ago. Revenue in the three months climbed 14.6 percent to 75.2 billion ringgit year on year.

Petronas said the outlook in the coming months was challenging as political instability in the Middle East and the protracted European crisis weakened demand for oil.

“We do not see much improvement from the first quarter going forward,” Petronas’ President and CEO Shamsul Azhar Abbas told reporters.

The company is facing diminishing oil and gas reserves in Malaysia and plans to spend 300 billion ringgit over the next five years to step up its deep-water exploration activities as well as re-exploring marginal fields.

Shamsul said Petronas will announce the award of the next round of risk services contracts (RSC) for the development of marginal oilfields in Malaysia in a few days.

Petronas awarded the first RSC to a consortium, comprising UK-based Petrofac Ltd (PFC.L) and SapuraKencana Petroleum Bhd SKPE.KL, for the development of the Berantai marginal field, off Terengganu state in January last year.

Meanwhile, Shamsul said the halt in its Sudan production is expected to cost Petronas some 3 billion ringgit in earnings to be reflected starting from the second quarter.

“We are lucky we have additional production in gas coming from Turkmenistan,” he said, adding the production of the gas will be higher in the second quarter.

Petronas is part of Chinese-Malaysian oil firm Petrodar. South Sudan said in February it had expelled the head of Petrodar, which is the main oil firm in the country, after accusing Chinese firms of helping Sudan to seize the southern oil. Oil from Sudan accounts for about 20 to 30 percent of Petronas’ international oil production, making it the single largest contributor.

    Shamsul said Petronas is requesting a cut in the annual dividend it pays to the Malaysian government to 28 billion ringgit this year from 30 billion in a move to preserve cash to help shore up production.

    “Mind you, the government is fairly aware of Petronas’ need to have our own funding for growth, they respect that and they will agree to our request,” he said.

    Shamsul said the time could be ripe for mergers and acquisitions as oil prices are expected to trend lower.

    “We are doing opportunity scanning now and building cash for it,” he added.

    (This May 31 story has been corrected to show Petronas will spend 300 billion, not million, ringgit over next five years)

    Reporting By Yantoultra Ngui; additional reporting by Niluksi Koswanage; Editing By Stuart Grudgings

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