Petronas delays Pengerang restart, sees challenging year

2/26/2021

Malaysia's Petronas has delayed the launch of its Pengerang Integrated Complex until the second half of the year from the first, but dismissed rumours partner Saudi Aramco was looking to exit the $27 billion project.

The state oil firm Petronas said it faced another challenging year after booking a 1.1 billion ringgit ($272 million) loss for the final quarter of 2020, its third quarterly loss in a row though higher prices and demand for LNG helped.

The world's fourth-biggest LNG exporter had earned a profit of 4.1 billion for the October-December quarter a year earlier.

"The outlook remains challenging with modest recovery in demand and oil prices, as the COVID-19 impact still continues with the emergence of new surges in cases," Petronas CEO Tengku Muhammad Taufik Tengku Aziz said.

"Despite the prolonged volatile and challenging outlook, Petronas remains optimistic on our recovery pathway," he said.

Revenue fell 31.3% to 44 billion ringgit.

For 2020, it recorded a profit after tax of 10.5 billion ringgit, it said. Excluding impairment charges, its cash flow from operations was 40.7 billion ringgit.

The firm, formally known as Petroliam Nasional Berhad, said 2021 will remain difficult due to the pandemic.

Petronas has allocated its annual capital expenditure at between 40 billion ringgit ($9.88 billion) to 45 billion ringgit for the next five years, with 55% of the allocation set for domestic operations, said Liza Mustapha, senior vice president and group CFO.

It boosted its capex allocation for new energy to 9% from 5% as it aims to expand its renewable energy portfolio.

It said the restart of the Pengerang complex in the southern state of Johor previously expected in March would be delayed until the second half of the year due to the pandemic. It dismissed rumours that partner Saudi Aramco was looking to exit the joint venture.

"Petronas and Saudi Aramco remain committed to the partnership.. It remains a commitment and I have engaged with the management of Saudi Aramco regularly," Tengku Muhammad said.

Last March a deadly fire at Pengerang forced the closure of the facility which had been set to start full commercial operations last year.

Its Myanmar operations were not affected by the military coup there, Tengku Muhammad added.