Malaysia's national oil company (NOC) Petroliam Nasional Berhad (PETRONAS) posted a profit after tax of $1.1 billion (MYR 4.6 billion) for the first quarter of 2016 (1Q 2016) that ended March 31, down 60 percent from $2.8 billion (MYR 11.4 billion) recorded in the same period last year, while revenue fell 26 percent to $12.1 billion (MYR 49.1 billion) from $16.3 billion (MYR 66.2 billion) in the corresponding period, financial results released Wednesday by the firm showed.
"The reduced revenue was mainly attributed to the lower product prices following the prolonged downward trend of benchmark Dated Brent and Japan Customs Cleared (JCC) prices, coupled with the lower sales volumes of crude oil and condensates, processed gas and petroleum products," the company said in the press release.
PETRONAS added that lower prices across all products and higher net impairment on assets had reduced profitability, which was partially offset by lower product and production costs and the impact of favorable exchange rate against the Malaysian Ringgit -- the local currency.
In the fourth quarter of 2015, the company posted a $740 million (MYR 3 billion) net loss, or 59 percent higher than the net loss of $1.8 billion (MYR 7.3 billion) in the corresponding period in 2014.
There was a 7 percent year-on-year (YOY) decline in capital investments by PETRONAS in 1Q 2016 to $2.8 billion (MYR 11.3 billion), compared to $3.0 billion (MYR 12.1 billion) in 1Q 2015, with the amount attributed largely to the Refinery and Petrochemical Integrated Development (RAPID) project in Johor and upstream capital expenditure in the country.
During this period, upstream production volume in Malaysia and PETRONAS Group’s international equity production volume rose to 2.45 million barrels of oil equivalent per day (MMboepd), up from 2.39 MMboepd previously. The increase was a result of higher Iraq production entitlement and new production stream from Indonesia, but this was offset by natural decline. Overall production entitlements to PETRONAS Group was 9 percent higher to 1.82 MMboepd.
Turning to gas, PETRONAS indicated that the total liquefied natural gas (LNG) sales volume shrank 9 percent in 1Q 2016 to 7.35 million tons due to lower production from PETRONAS LNG Complex in Bintulu, Sarawak, compared to 8.06 million tons in 1Q 2015.
Going forward, the Malaysian NOC noted that crude oil prices will continue to be pressured by concerns arising from the moderate demand outlook and persistent oversupply. The firm expects its financial performance will be affected by the volatility of oil prices and foreign exchange rate.
"PETRONAS will continue with its cost rationalization efforts to remain competitive while pursuing efforts to drive operational efficiencies and effective delivery of growth projects that bring value," the firm said in the press release.
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