Petronas - Maximising O&G output

By Sharen Kaur
Published in NST on April 14, 2014

INCREASING ENERGY SUPPLIES: Petronas looks to deepwater projects, risk service contracts and unconventional gas sources

PETROLIAM Nasional Bhd (Petronas) is focusing on deepwater projects, risk service contracts (RSC) and unconventional gas sources internationally to increase energy supplies and earnings.

The national oil company believes that there is still upside potential in every aspect of the oil and gas industry in Malaysia and overseas.

“We are looking at marginal oil fields internationally, such as in the Middle East, central Asia, South Africa, the United States and Russia,” Petronas director Tan Sri Megat Najmuddin Megat Khas told Business Times.

Vestigo Petroleum Sdn Bhd, a unit of Petronas Carigali Sdn Bhd, has been set up to focus on development and production in small, marginal and mature fields in Malaysia and abroad.

Petronas has 107 marginal oil fields, mostly in Peninsular Malaysia and Sarawak.

Each oil field has reserves of 30 million barrels of oil equivalent (BOE) and is governed by RSC.

With crude oil trading at around US$100 (RM324) per barrel, these marginal fields hold US$58 billion worth of oil.

“For unconventional gas sources, we are looking at Canada, Australia and others.”

Petronas’ capital expenditure (capex) for the next five to six years is around RM200 billion.

There will be allocation for the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang, Johor, upstream (exploration and production) and downstream activities.

“I estimate the capex for downstream activities to be RM40 billion as we need to refurbish some old plants and lay new pipelines,” said Megat Najmuddin.

He said Petronas is doing well and will continue to churn out high revenues and profits.

“We have good governance and management structures.”

In the financial year ended December 31 2013, Petronas’ revenue rose nine per cent to RM317.3 billion from RM291.23 billion in fiscal year 2012.

Its profit after tax was up 13 per cent to RM65.58 billion from RM59.52 billion as total production rose 5.8 per cent to 2.13 million barrels of oil per day.

Total assets increased to RM528.7 billion from RM489.2 billion in 2012, helped by higher profit generated in the year.

On its exploration and production operations, Petronas reported that total production volume in fiscal year 2013 was 2,127,000 BOE compared with 2,010,000 BOE in 2012.

Crude oil and condensates production volume was higher by 6.8 per cent, mainly due to production resumption in South Sudan, coupled with new fields in Malaysia and Iraq.

Natural gas production volume was higher by 5.3 per cent compared with the same period last year, mainly contributed by new producing fields in Malaysia and additional production from Canada.