Petronas Profits Jump, LNG Sales Rise Too, as Korean Deal Announced
Malyasian state-owned Petronas reported a sharp rise in profit after tax for the quarter that ended June 30, mainly due to higher average realised prices, better margins, reduced costs, and increased LNG sales volume, it said August 25.
Profit after tax in 2Q 2017 was ringgit 7bn ($1.64bn) compared with ringgit 1.7bn in Q2 2016, a significant improvement mainly due to lower net impairment on assets and well costs, coupled with higher average realised prices recorded across all products, Petronas said. This was partially offset by higher net foreign exchange losses, amortisation of oil and gas properties, and undisclosed non-FID costs for Pacific Northwest LNG (PNW).
Petronas scrapped that Canadian project late last month, blaming the "extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry." But despite not proceeding with PNW, the company said it remains committed to monetise gas resources in western Canada's North Montney area. At 22.3 trillion ft3 of proven resources, Canada holds the second largest gas resources in Petronas' portfolio, after Malaysia. Progress Energy Canada, wholly-owned by Petronas, is producing some 540mn ft3/d to the domestic market.
Petronas's revenues increased by 10% year on year to 51.6bn ringgit ($12bn) in 2Q 2017.
For 1H2017, profit after tax was up more than 100% to ringgit 17.3bn ($4bn) while revenue was up 15% at ringgit 108.1bn ($25.3bn).
Production down, but LNG sales up
Total production volume for 1H2017 was 2.34mn boe/d, compared with 2.39mn boe/d in the same period last year. Five new and infill projects were brought on-stream in 2Q 2017, contributing to 44,000 boe/d of production.
LNG sales recorded a 2% increase in volume compared with 1H2016 mainly attributable to the higher volume from Train 9 in Malaysia but also from its interest in the Egyptian LNG venture at Idku. Additionally Petronas-owned PFLNG Satu, the world's first floating LNG export unit, delivered two cargoes: to India and Taiwan. PFLNG Satu loaded its first cargo in early April.
Not cited in Petronas's statement, but reported by Singapore newspaper The Business Times August 25 is a new Petronas deal to supply South Korean refiner S-Oil with 0.7mn metric tons/yr of LNG during the period March 2018 to March 2033; the newspaper said the deal was reported in a stock market filing by S-Oil, which is controlled by Saudi Aramco.
PFLNG Satu (Credit: Petronas)
Shardul Sharma