Petronas to seek new biz in solar, wind energy

pic by BERNAMA

PETROLIAM Nasional Bhd (Petronas) will continue to expand its business portfolio, particularly in renewable energy (RE), to build its resilience against all challenges that are faced by the oil and gas (O&G) industry.

Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed (picture) said in a written reply to Dewan Rakyat dated Dec 2, 2020, that the plunge in crude oil prices has forced the state-owned firm to look into new opportunities.

“Petronas will continue to review opportunities and portfolio in new businesses to further strengthen its resilience amid the challenging global market environment, especially in RE such as solar and wind energy.

“The group’s financial loss in its recent quarter was due to the low income and significant declining in asset value following the decline in oil prices.

“It was due to the weak demand, the spread of Covid-19 and the excess supply present in the market,” he said.

Petronas’ loss after tax for its third quarter ended Sept 30, 2020 (3Q20), eased to RM3.37 billion from RM21.04 billion posted a year ago, as a result of higher Ebitda and lower impairment losses on assets.

In 2Q this year, the Brent crude oil prices continued to fall to an average of US$29.20 (RM118.96) per barrel compared to US$68.83 per barrel in the similar quarter in 2019, caused by the weak demand and oversupplies.

“The oversupply, which has been known as the “great reset”, brings a great negative implication to the global oil prices, as well the, financial position of major companies, including Petronas.

“The challenging and volatile market conditions are expected to continue until the end of this year. Experts anticipate that the global O&G companies will lose about US$1 trillion of revenue this year due to the current market conditions,” he said.

Mustapa added that Petronas will continue to adopt the three-pronged strategies in its long-term plans, which include maximising cash generation, expanding core business and ensuring a long-term sustainability of the company in new business opportunities.

Separately, Mustapa said the appointments of any individuals for positions within Petronas will not sever investors and market’s confidence in the group.

Mustapa was responding to a query by Lim Guan Eng (DAP-Bagan) who asked the minister to confirm if the government has offered a position in Petronas to Gua Musang MP Tan Sri Tengku Razaleigh Hamzah and if it is based on a political transaction.

Tengku Razaleigh previously revealed that he was offered an advisor post by Prime Minister Tan Sri Muhyiddin Yassin, which he rejected.

“Offering a position to any individual will not affect market confidence in Petronas as it is a well-managed company led by an efficient management team.

“Market and investor’s confidence will depend on various factors such as the country’s economic growth, global trade, the ongoing Covid-19 pandemic crisis.

“The factors are worsened by the fall in crude oil and the trade war between the US and China,” he said.

Read our earlier report

Petronas to deploy low-carbon solutions