Malaysia’s Petronas posts profits drop

Petronas MY

(Yahoo!News) – Malaysian state energy firm Petronas said Monday net profit fell 34 percent in the third quarter and warned of challenging times ahead due to global economic uncertainty.

Profit at Malaysia’s biggest company dipped to 15.6 billion ringgit ($5.2 billion) in the three months to December 31, compared to 23.7 billion in the corresponding period a year before.

Petronas attributed the drop to a higher base of comparison in the third quarter of 2010 due to one-off gains from the listing of two subsidiaries that amounted to 9.2 billion ringgit.

Petronas said cumulative profit for the nine months to December 31 was 10.6 percent higher than the same period a year earlier, reaching 55.6 billion ringgit due mainly to higher crude oil prices and sales.

Revenue for the period rose 26.9 percent to 222.80 billion ringgit.

But Petronas president and CEO Shamsul Azhar Abbas warned that this year and next would be tough due to uncertainties in crude oil prices on the back of Europe’s economic woes and lower expected crude production.

“Europe is going into a recession. Demand from BRIC economies — Brazil, Russia, India and China — is going to be weak,” he told reporters, adding that “geo-political tensions in the Middle East” were also clouding the outlook.

The next two years would “not be as strong as we have seen last year as the current crude oil prices won’t last long,” he added.

Shamsul said crude oil prices were expected to hover at between $85 to $90 per barrel this year — compared to around $110 currently — before rebounding in 2014.

Shamsul said Petronas would continue to focus on domestic exploration in deepwater areas and on re-exploration in marginal fields as it faces depleting oil and gas reserves in the country.

Crude output was expected to be lower in 2012 due to depletion, he said.

“Our challenge is going to be in production,” he said.

Petronas — Malaysia’s only Fortune 500 company — contributes almost half of the country’s budget revenues.

Although the recent quarter was the third of the fiscal year, Petronas has ended the financial year on December 31 as part of an adjustment that will see its new financial year start from January 1 from now on. – AFP