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Unlisted Petronas accounts for nearly half of Malaysia’s government budget revenues.

Petronas: Special Report by Reuters

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• 9 Jan 2013
• The Star Malaysia
• By STEPHEN THEN, ISABELLE LAI and CHOONG EN HAN newsdesk@thestar.com.my

Oil’s well for the
future

Rich deposits of crude oil and gas discovered in Sarawak’s inland areas

Rich deposits of crude oil and gas have been discovered in Northern Sarawak. The latest find — the first on land after 24 years — is poised to open up new frontiers in inland oil and gas exploration there and could keep Malaysia as a net oil producer until after 2020. MIRI: Rich deposits of crude oil and gas have been discovered in the vicinity of Miri City in northern Sarawak – the first time in 24 years that “black gold” has been found in such a sizeable volume in the inland areas of Malaysia.

The discovery of the underground reserves by Petronas and Nippon Oil is poised to open up new frontiers in inland oil and gas exploration.

Miri MP Datuk Seri Peter Chin said yesterday it also signalled the possibility of more such finds in oil-rich Miri and the rest of northern Sarawak.

The Energy, Green Technology and Water Minister said he was informed by Petronas Exploration and Production Business Executive vice-president Datuk Wee Yiaw Hin that the national oil giant had announced the discovery at Block SK 333 onshore of Sarawak, via the Adong Kecil West 1well, some 20km northeast of Miri city, yesterday.
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Petronas, in a press statement, said the last time such an onshore discovery was made was in 1989, in the Asam Paya Oilfield, also in Sarawak.

Oil’s well for the future

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On a tip from wits0

KUALA LUMPUR – Malaysian state-owned oil and gas firm Petronas said on Friday it has made an onshore oil and gas discovery in the country after 24 years, adding to the Southeast Asian nation’s efforts to lift slowing output.

The exploration arm of Malaysia’s Petronas and Japan’s JX Nippon Oil & Gas Exploration drilled 3,170 metres into the Adong Kecil West-1 Well in Sarawak state on Borneo island, Petronas said in a statement.

The well, about 20 kilometres away from the nearest city of Miri, was found to have a net hydrocarbon thickness of 349 metres. It had flow rates of 440 barrels of crude oil per day and 11.5 million standard cubic feet of gas per day, the company said.

“To-date, three discoveries have been found onshore Sarawak, namely the Miri, Asam Paya and now Adong Kecil West fields,” it said.

“These discoveries prove that onshore Sarawak has the potential for more oil and gas accumulations where the Miri Field, Malaysia’s first oil field, was discovered way back in 1910.”

Petronas in Malaysian onshore oil and gas find after 24 years

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Malaysian Insider

Petronas CEO ready to quit any time

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Free Malaysia Today

Canada blocks Petronas’ bid for Progress Energy

TORONTO: Canada blocked Malaysian state oil company Petronas’ C$5.17 billion ($5.22 billion) bid for gas producer Progress Energy Resources Corp on Friday, a surprise ruling that could have implications for a much bigger offer by China’s state-owned CNOOC for oil producer Nexen Inc.

“I can confirm that I have sent a notice letter to Petronas indicating that I am not satisfied that the proposed investment is likely to be of net benefit to Canada,” Christian Paradis, Canada’s minister of industry, said in a late-night statement.

Petronas has up to 30 days to make additional representations that could make its deal more palatable. Petronas said it was not ready to make any comment.

“Due to the strict confidentiality provisions of the (Investment Canada) Act, I cannot comment further on this investment at this time,” Paradis said.

The Petronas bid for Progress had not been expected to run into hurdles in a review process that asks the government to examine whether a deal is of “net benefit” to Canada.

But the deal attracted a lot more attention and scrutiny after oil major CNOOC Ltd made a C$15.1 billion bid for Canada’s Nexen Inc.

Canada blocks Petronas’ bid for Progress Energy

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Malaysiakini

Since Najib Abdul Razak took over the premiership in 2009, the national oil and gas company Petronas has been instructed to move its overseas investment into the domestic market to benefit his cronies and prop up economic growth, claimed PKR director of strategy Rafizi Ramli.

Describing it as a “shortcut to benefit cronies”, Rafizi (right) said this has disrupted Petronas’ strategy which has been in place for the past 20 years to build up Malaysian international oil reserves to ensure sustainable petroleum income for the nation.

Being an oil producer with strong international oil reserves, he explained, would enable Malaysia to take advantage of the trading margin which could be leveraged to lower our fuel prices.

Transparency lacking

Rafizi was answering a question from the floor on how Pakatan Rakyat would slash fuel prices if it captures Putrajaya, during a public forum on Budget 2013 last night in Petaling Jaya.

He also claimed that after former Petronas chief executive officer Hassan Marican stepped down in February 2010, reportedly due to friction with Najib, Petronas has stopped publishing information in its financial report on the breakdown of subsidy payments to the government, including the amount paid to independent power producers.

‘Najib switches Petronas’ investment to benefit cronies’

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Malaysian Insider

KUALA LUMPUR, Sept 7 ― Petronas, previously described as Putrajaya’s “piggy bank”, said today it will pay the government RM30 billion in dividends this year despite falling profits and a challenging outlook.

The amount will likely make up more than a third of the state oil company’s net profit, after it said today that it may struggle to hit RM90 billion in pre-tax profit for the year.

Petronas chief executive Tan Sri Shamsul Azhar Abbas said, however, that there is an understanding with the Ministry of Finance that dividends will be capped at 30 per cent of profit starting next year.

“This year we will maintain what was committed,” he said in a media briefing.

Global ratings agencies as well as the World Bank have warned that Malaysia is over-reliant on oil income.

Dividends from Petronas are estimated to make up about 40 per cent of federal government revenues.

If the trend of lower profits extends into next year, the government could see a drop in dividends from Petronas, potentially affecting its fiscal reform eff

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Petronas to pay RM30b dividend despite uncertain profits

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Malaysian Insider

KUALA LUMPUR, Sept 7 ― Petronas said today that the country’s dependence on subsidised gas could cost it nearly RM30 billion this year or about twice its second quarter net profit.

The state oil company is struggling under a crushing gas subsidy burden and forgoing massive revenue due to federally mandated prices for gas that are below market levels.

Petronas chief executive Tan Sri Shamsul Azhar Abbas said that the country has an “insidious addiction” to subsidies and, for the first half of this year, the cost to subsidise gas amounted to RM14 billion.

“If you extrapolate that, it will be RM28 billion for 2012,” he said in a media briefing. “That is revenue foregone and money required to grow the business.”

The amount for this year is likely to exceed the RM23.7 billion incurred last year and comes at a time when Petronas is facing uncertainty in the coming quarters due to volatile oil prices and production problems.

Petronas: ‘Insidious addiction’ to gas subsidies could cost RM28b

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Sundaily

MALAYSIA‘s Petronas Nasional Bhd posted a 30% drop in second-quarter profit on softer crude oil prices and a production standstill in southern Sudan and warned the government – its major shareholder – that it will struggle to meet dividend payments.

Petronas said its profit for the quarter ended June 30 fell to RM15.2 billion from RM21.7 billion a year ago.

The coming months are expected to be challenging as the global economic crisis festers, CEO Shamsul Azhar Abbas said, adding the problems in South Sudan could hit the company’s bottomline by up to US$1 billion (RM3.11 billion) a year.

“It will be a struggle for Petronas to match its strong performance in 2011. This is for management of expectations, not a profit warning,” Shamsul told reporters at the results briefing.

“If oil prices fall to US$80 per barrel, it would be difficult to meet capex spend and meet government dividend payments,” he added.

Unlisted Petronas accounts for nearly half of Malaysia’s government budget revenues and needs to secure more overseas reserves to offset declining output and maintain profits.

Petronas Q2 net profit falls 30%, tough year ahead

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