High oil price boosts Petronas’ 3Q net profit to RM14.3b


The turnaround in global oil prices to multiyear highs helped Petroliam Nasional Bhd (Petronas) to register a 43.98% jump in net profit to RM14.34 billion for the July through September period.

In the third quarter (3Q), global oil prices were traded around US$70 (RM293.22) a barrel, compared to US$50 a barrel a year before, lifting the state-owned energy firm’s revenue by almost 20%.

Petronas’ revenue for the quarter rose by 19.06% to RM63.91 billion, largely from higher average realised prices of key products. The group’s effort to boost efficiency also helped the company.

However, the national oil and gas company said its financial performance was dented by higher product costs, higher depreciation and amortisation, a stronger ringgit against the US dollar and lower liquefied natural gas (LNG) sales.

Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said the company continued to record another strong quarterly performance, which further strengthened its financial position.

“The improved results are driven by ongoing operational improvement efforts throughout the group and supported by improved oil prices during the period.

“Petronas is on track to deliver a strong year-end performance by maintaining our focus on driving efficiency efforts across all our operations,” he said in a statement.

Petronas recently hogged the limelight after the government announced that the state-owned energy company will release RM30 billion in dividends, prompting some rating agencies to turn negative on its outlook.

The government, however., defended the move, saying that the national oil company has ample cash reserve.

Despite the strong quarterly performance, Wan Zulkiflee said the recent drop in global oil prices demonstrated the volatility and cyclical nature of the industry.

“We will continue to maintain our prudent outlook amid this landscape, while remaining steadfast in pursuing our growth strategies to ensure the long-term sustainability and progress of the company,” he said.

Oil prices had rushed to near the US$85 a barrel mark, a recent multiyear high for the commodity, but higher production had pushed the price to below the US$60 level in the last few days.

Oil prices rebounded to about the US$60 level yesterday.

Meanwhile, Petronas’ upstream division recorded a higher revenue of RM37.18 billion in 3Q compared to RM31.23 billion a year ago. Profit after tax for the segment was 45.81% higher at RM8.18 billion, compared to RM5.61 billion last year.

The upstream division produced 2,176 thousand barrels of oil equivalent (boe) per day compared to 2,206 thousand boe per day a year earlier. The drop was largely due to the lower gas production due to its Sabah-Sarawak Gas Pipeline incident.

Total LNG sales volume for the period also dropped by 0.91 million tonnes compared to last year.

Meanwhile, the downstream division’s 3Q revenue was RM34.63 billion against RM28.09 billion in the previous corresponding quarter, mainly driven by higher average realised prices for crude oil, petroleum and petrochemical products.

Petroleum products sales volume dropped by 0.5 million to 65.2 million barrels, mainly due to lower sales from its marketing and trading activities.

During the 3Q, Petronas’ crude oil sales volume dropped to 35.9 million barrels, 1.9 million barrels lower than the previous corresponding period.