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Petronas Sees Tough 2013

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KUALA LUMPUR - Malaysia's Petroliam Nasional Bhd said Thursday that fourth-quarter net profit more than halved from a year earlier due to lower crude production, adding that 2013 will likely be a tough year as demand is expected to remain weak.

The state-run energy company, more commonly known as Petronas, is Malaysia's only Fortune 500 company and the Southeast Asian country's most profitable enterprise. The company is also the single largest contributor to the state's coffers, with close to $10 billion in annual dividend payments to the government.

Petronas made headlines when it acquired Calgary's Progress Energy Resources Corp. for more than 5.8 billion Canadian dollars (US$5.9 billion). More recently, upstream energy company Japan Petroleum Exploration Co. struck a deal to buy 10% of a Canadian liquefied natural gas venture and shale gas project controlled by Petronas.

Net profit for the three months ended Dec. 31 was 5.97 billion ringgits ($1.92 billion), compared with MYR13.81 billion a year earlier, after recording a one-off loss from writedown of its investments in Egypt, Petronas said in a statement. Revenue fell 1.6% to MYR76.77 billion from MYR78.05 billion.

"[In terms of profit], we don't think it's going to change very much in 2013," Shamsul Azhar Abbas, president and group chief executive, told an earnings briefing.

The energy industry is suffering from "demand destruction" and the average crude price is likely to fall, he said, but added that the company's focus this year would still be on boosting production.

Petronas lost around 120,000 barrels of oil a day in output last year [from South Sudan] due to a dispute between the country and its neighbor over transit fees, even though its production in Sudan was unaffected.

Output may pick up towards the final quarter of 2013 once the company's oil fields in Iraq start production, Mr. Shamsul said.

Crude output fell to 745,000 barrels a day in the fourth quarter from 828,000 barrels a day from a year earlier. Natural gas production rose to 1.34 million barrels of oil equivalent a day from 1.27 million barrels of oil equivalent a day.

For the entire year, net profit declined 17.3% to MYR49.39 billion from MYR59.69 billion. The results included one-off gains amounting to MYR1.5 billion from the sale of stakes in Centrica PLC and APA Group. In 2011 too, Petronas posted a one-time gain of MYR2.6 billion from the sale of its stake in Cairn India Ltd.

Revenue for 2012 rose 0.9% to MYR290.98 billion from MYR288.47 billion. 

Copyright (c) 2012 Dow Jones & Company, Inc.

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