Malaysia's Petronas Posts Higher Q4 Profit, Sees Lower Oil Prices in 2023

Malaysia's state oil firm Petroliam Nasional Berhad on Monday posted a 55% jump in quarterly profit on higher energy prices and bigger sales volume, but warned of moderating prices for this year due to an expected slowdown in the global economy.

Petronas, as the company is known, reported a profit of 24.4 billion ringgit ($5.44 billion) for the three-month period ending December 2022, compared with a profit of 15.7 billion ringgit in the same quarter a year ago.

Revenue jumped 38% to 105.9 billion ringgit. 

For 2022, Petronas joined other oil majors in posting record financials: revenue surged 51% to 375.3 billion ringgit, while profit doubled to 101.6 billion ringgit. 

Energy prices rose in 2022 after Russia's invasion of Ukraine, boosting oil companies' profits. 

Petronas' Chief Executive Officer Tengku Muhammad Taufik said he expects prices to correct this year.

"As demand recovery is still fragile, based on supply challenges, this means volatility," he said at a news conference.

Petronas also said the group will continue to exercise prudent financial management and firm discipline in reinvesting.

Capital expenditure for 2023-2027 will be increased to about 300 billion ringgit from 208.5 billion ringgit in 2018-2022, it said. 

Tengku Taufik said they foresee raising capex through partnerships, particularly with energy investors, rather than through the capital markets.

Up to 20% of its annual capital expenditure, or up to 12-15 billion ringgit annually, will be committed to decarbonisation and energy transition.

Petronas has declared force majeure on gas supply to one of its liquefaction terminals, Malaysia LNG Dua, due to a pipeline leak caused by soil movement at the Sabah-Sarawak Gas Pipeline on Sept. 21.

The firm believes it will be able to serve its full contract requirements for 2023, Tengku Taufik said. 

The firm said it has terminated the Limbayong deepwater development project in offshore Sabah due to inflation, but is looking at other ways to approach it.

($1 = 4.4840 ringgit)

 (Reporting by Mei Mei Chu; Writing by A. Ananthalakshmi; Editing by Kanupriya Kapoor)

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