PETROLIAM Nasional Bhd (Petronas) may cut its capital expenditure up to RM10 billion upon concluding the protracted agreement with Petroleum Sarawak Bhd (Petros).

 In a research note released today (Jan 10), Kenanga Investment bank Bhd said any potential capex cut by the national oil company due to its agreement with Petros would not exceed RM10 billion annually, describing it as a ‘modest reduction’ from its projected RM60 billion per year. 

 “We believe that the calculation is justified, considering that Sarawak must still pay for the LNG infrastructure previously developed by Petronas, including LNG trains and liquefaction plants. 

 “Additionally, we believe it is in the mutual interest of Petros and Petronas to eventually ramp up upstream investments to maximise their long-term revenue potential,” it said in the note.

 A local newspaper had reported that the Petros-Petronas gas distribution in Sarawak has been concluded, with the government now refining the agreement’s details and implications. 

 The report, quoting Fitch Solutions, said Southeast Asia’s national oil companies (NOCs) were projected to increase their combined capex by 29% YoY to US$31 billion in 2025, driven by 58 greenfield projects and 22 field expansions. 

 A foreign news agency reported PTTEP planned to allocate US$5 billion in 2025 as part of its US$21.2 billion five-year plan, focusing on key assets and overseas projects, with the Lang Lebah gas field in Sarawak’s SK410B block expected to reach a final investment decision. — TMR