The firm’s better performance is due to its ongoing transformation efforts

By FARA AISYAH / Pic By AFIF ABD HALIM

PETROLIAM Nasional Bhd’s (Petronas) profit after tax (PAT) grew 26% year-on-year (YoY) for the first three months of 2018 (1Q18) to RM13.02 billion as a result of higher revenue, as well as net write-back on impairment, partially offset by higher net product and production costs.

Petronas’ revenue for the quarter increased 2% to RM57.92 billion from RM56.52 billion in 1Q17, driven mainly by higher average realised prices recorded across all products which was largely offset by the strengthening of ringgit against the US dollar.

Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin (picture) said the company’s encouraging performance in the 1Q was attributed to its ongoing transformation efforts, which focus on overall business improvement and operational excellence, coupled with a recovery in commodity prices.

“While oil prices have trended upwards, the industry must continue to be diligent in institutionalising the costeffective discipline, and the drive for efficiencies pursued over the past few years.

“This will ensure the sustainability of Malaysia’s oil and gas industry in the current competitive global landscape,” he said in the statement.

Petronas’ upstream business’ PAT rose to RM10.2 billion in the 1Q compared to RM5.1 billion in the same period last year, mainly due to higher revenue coupled with net write-back on impairment.

Revenue increased to RM37.2 billion compared to RM34.6 billion in the corresponding quarter last year, which was mainly contributed by higher average realised prices across all products. The increase was partially offset by the strengthening of the ringgit against the US dollar.

The total production volume for the 1Q improved to 2,461 thousand barrel of oil equivalent (BOE) per day compared to 2,387 thousand BOE per day in the same quarter last year, mainly due to higher gas demand in Malaysia-Thailand Joint Development Area and Turkmenistan.

The total liquefied natural gas (LNG) sales volume for the quarter was also higher by 0.42 million tonnes compared to the corresponding quarter last year, mainly attributable to higher volume from both Petronas LNG Complex and trading activities.

Malaysia’s average sales gas volume increased by 61 million standard cu ft per day compared to the same period last year, mainly contributed by higher demand.

The group’s downstream business recorded a PAT of RM2 billion for the January to March period, mainly contributed by the solid performance of the petrochemical business. This partially offsets the lower domestic refining margin and the effect of the strengthening of the ringgit against the US dollar.

Operationally, its overall equipment effect iveness remains commendable across all business segments at 94.7%, with domestic refineries and the refinery in Durban, South Africa, recorded 89.6% and 99% respectively.

Its petrochemicals business recorded a strong plant utilisation rate of 100% contributed by healthy feedstock supply, which resulted in higher production activities.

Correspondingly, petrochemical sales volume for the 1Q was recorded at 2.2 million metric tonnes (MT), higher than the same period last year which recorded two million MT.

In March, Petronas and Saudi Aramco concluded the share purchase agreement for equal ownership and participation in the operation of the refinery, cracker and selected petrochemical plants within the Pengerang Integrated Complex (PIC).

The project has achieved an overall progress of 90% as at the end of April 2018, and successfully powered its critical components within the refinery complex. PIC is on track to achieve Ready for Start-Up status in 2019.

In addition, the highly reactive polyisobutene plant in Gebeng, Pahang, also came on stream in January 2018.