Sources: Petronas May Slash Domestic Investment 30% as Crude Slumps



Reuters

KUALA LUMPUR, Jan 7 (Reuters) - Malaysian state oil firm Petronas may slash capital expenditure even more than it has signalled because the continuing rout in oil prices has hurt revenue, with domestic spending facing cuts of about 30 percent, sources said on Wednesday.

Some domestic and international projects that may become unprofitable due to the continued decline in oil prices could be shelved by Petronas, or Petroliam Nasional Bhd, three sources with knowledge of the matter said.

"When oil prices drop too low below our threshold, we will evaluate everything from scratch. But it is all weighed out, it's not just about monetary value," said one source.

"There's a series of projects over the next few years, some of which they will defer, some they will cut," the source added, without naming specific projects.

Petronas did not immediately respond to requests for comment.

Chief Executive Shamsul Azhar Abbas had warned in late November that capital expenditure could be cut by 15 to 20 percent this year because of the drop in oil prices.

Brent crude was trading around $71.30 per barrel at that time but has since slumped below $50 for the first time since May 2009 because of a global supply glut.


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