Petronas Posts $8.6B Profit after Tax for First Half

Malaysia's national oil and gas company has reported $8.63 billion (MYR 40.2 billion) in income after tax for the first six months of 2023, down 13 percent compared to the same period last year due to lower prices.

Petroliam Nasional Berhad (Petronas) collected $36.57 billion (MYR170.3 billion) in revenue for the January-June period, down from $36.59 billion (MYR170.4 billion) for the first two quarters of 2022. "This is mainly due to lower average realized prices for major products in line with the lower benchmark prices, partially offset by improved sales volumes mainly from petroleum and petrochemical products and favorable foreign exchange impact", the state-owned company said in a press release last week.

Earnings before interest, tax, depreciation and amortization stood at $15.14 billion (MYR 70.5 billion) for the first two quarters of 2023, down from $17.76 billion (MYR 82.7 billion) for the same period last year.

It sold 2.214 billion cubic feet per day of gas to customers in peninsular Malaysia during the first half of 2023, as well as delivered 200 liquefied natural gas (LNG) cargoes from the Petronas LNG complex in Sarawak's Bintulu district and 19 LNG cargoes from floating facilities PFLNG Satu and PFLNG Dua to customers across the globe, according to its quarterly results announcement.

Petronas produced 2.425 million barrels of oil equivalent per day (boepd) on average for the first half of 2023, the same as during the corresponding 2022 period. It sold 12.8 billion liters during the period, up 6.7 percent driven by Petronas Dagangan Bhd.'s retail and aviation sectors.

Petronas said it started production at 11 hydrocarbon projects, seven at home and four abroad, during the first half of 2023, while reaching final investment decisions for 12 more, nine in Malaysia and three overseas. It also made five oil and gas discoveries in five blocks offshore Sarawak state on the Malaysian side of Borneo island, Petronas noted in the news release.

In the chemicals segment, Kuala Lumpur-based Petronas sold 4.9 million metric tons as plant utilization improved to 89.1 percent compared to 79.2 percent in the first half of 2022.

Petronas generated $12.41 billion (MYR 57.8 billion) from operating activities in the first half, down seven percent. It enters the second half with $46.73 billion (MYR 217.586 billion) in cash and cash equivalents and total current liabilities of $23.18 billion (MYR 107.957 billion).

Petronas declared $75,163.76 (MYR 350,000) per ordinary share February 23, with $3.44 billion (MYR16 billion) paid out of a total of $7.52 billion (MYR 35 billion). On June 22 it declared $10,737.68 (MYR50,000) per ordinary unit, or $1.07 billion (MYR 5 billion) in total.

"Looking ahead, we expect to face increasingly difficult headwinds, including a bearish energy market for the rest of the year on the back of slowing global economic activity", president and chief executive Tengku Muhammad Taufik said in a statement.

"Despite near term challenges, we will continue to focus on future-proofing the organization for the long term. This will mean scaling up investments in our core business, even as we lower emissions while investing in cleaner energy to ensure the robustness of the Group’s portfolio, aligned to our Energy Transition Strategy."

Petronas said it had 23.04 million metric tons of carbon dioxide equivalent cumulative emissions from its operations in Malaysia as of the end of the second quarter of 2023. "An increase of three percent was recorded for the period, mainly due to increase in production at Downstream refineries", its results announcement stated.

During the first half Petronas signed a deal with TotalEnergies SE and Mitsui & Co. Ltd. to establish a carbon dioxide “merchant storage service” that would cater to Asia’s industrial sector, according to a press release by the French global energy giant June 26.

“The partners will evaluate several CO2 storage sites in the Malay Basin, including both saline aquifers and depleted offshore fields”, the media release said.

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