Malaysia's state-owned Petronas remained committed to its capital expenditure plans even though it anticipated continuing challenges due to bearish market sentiment, CEO Wan Zulkiflee Wan Ariffin said Wednesday.
The projects that the company will focus its capital investment on include the Refinery And Petrochemical Integrated Development project in the southern Johor state; the Pacific North West LNG Project in Canada; LNG Train 9 in Bintulu; and the two floating LNG projects being constructed in South Korea.
"These capex projects are investments for the long term, and we are set on seeing them through successfully to ensure Petronas' sustainability well into the future," Wan Zulkiflee said in a statement while announcing the company's Q3 2015 results.
Petronas' capital investment in the first nine months of 2015 stood at MR49.7 billion ($11.42 billion), up 5.5% from MR47.1 billion in the same period the previous year, and can mainly be attributed to the acquisition of Statoil's Shah Deniz assets, domestic upstream capex and the RAPID project, Petronas said.
Wan Zulkiflee said that the company was bracing itself for a long drawn-out period of low oil prices, but added that he was confident of being able to weather the storm, given its cash flow.
The company had a cash flow of MR17 billion in Q3 and MR51 billion in the first nine months of the year -- levels that the company had expected given the external factors, Wan Zulkiflee said.
HIGHER OUTPUT
Petronas produced 2.18 million b/d of oil equivalent in Q3, up 4.8% from 2.08 million b/d in Q3 last year.
Crude oil and condensate production was 893,000 boe/d, up from 822,000 boe/d in Q3 2014.
The company attributed the rise to output enhancement efforts and new production stream from Malaysia.
Natural gas production rose to 1.29 million boe/d in Q3 from 1.26 million boe/d in Q3 2014, mainly due to additional production from Azerbaijan and production optimization efforts in Malaysia, though this was partially affected by natural declines in Egypt, the company said.
Petronas sold 70.9 million barrels of refined products in Q3, down from 75 million barrels in Q3 2014.
Its crude oil sales volume was 48.2 million barrels, down from 51.2 million barrels mainly due to lower trading volumes.
LNG sales were flat at 7.2 million mt, the company said.
Natural gas sales volume rose to 2.76 Bcf/d in Q3 from 2.65 Bcf/d in Q3 2014.
Petronas reported a net profit of MR1.4 billion in Q3, bringing the company's year-to-date net profit to MR24 billion, down 57% year on year.
Net profit was affected by impairments taken on some upstream assets in response to prolonged low oil price and an oversupplied global market, Petronas said.
The company recorded a revenue of MR60 billion in Q3, 25% lower than in the corresponding period last year.
This brings Petronas' year-to-date revenue to MR188 billion against MR250 billion in the same period in 2014.
The results reflected the impact of continued low oil prices, with Brent price averaging $50/barrel in Q3, compared to $62/b in Q2, Petronas said.
RAPID PROGRESS
Petronas said Wednesday that the RAPID project was on track for Phase 2 of the site preparation while the refinery and cracker construction was progressing on schedule.
Wan Zulkiflee had said earlier that the project would be completed in Q1 2019 and commercial operations would begin in Q2.
The $16 billion project, which includes a 300,000 b/d refinery and a petrochemical complex, will also have an LNG regasification terminal, water supply facilities and a co-generation power plant.
The refinery will be Malaysia's largest and double Petronas' domestic refining capacity to 637,000 b/d and increase the country's total refining capacity to 881,000 b/d.
