Page 14 - MEOG Week 21

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The NOC was forced into rethinking its posi- tion after its first-quarter net profit plummeted to MYR4.5bn ($1.03bn), down by 68% year on year from the figure of MYR14.2bn ($3.25bn) posted in the same period of 2019. The company blamed the result on net impairment of assets, as well as a 4% slide in revenue to MYR59.6bn ($13.66bn) from MYR62bn ($14.21bn) in Jan- uary-March 2019.
The company’s upstream division was the worst performer, with the segment’s profit diving 63.1% to MYR1.93bn ($442.3mn), down from MYR5.22bn (1.2bn). The drop occurred despite the fact that Petronas’ upstream revenue actually climbed 6.22% to MYR9.7bn ($2.22bn), up from MYR9.13bn ($2.09bn) a year earlier.
President and CEO Wan Zulkiflee Wan Arif- fin warned of a “very challenging” year ahead and said the company would focus on preserv- ing its liquidity and cutting costs. “We anticipate a very challenging outlook for the rest of 2020, with economic activities expected to only gradu- ally recover in the second half of the year. Indus- try players, including Petronas, will be adversely impacted if the current market situation persists and oil prices remain low.”
Petronas did report an uptick in production in the first three months, thanks to stronger performance from its Brazilian assets. Never- theless, it said it would trim its output in order to account for both its OPEC+ commitments as well as weakening demand following prolonged international and domestic lockdowns.
Ifyou’dliketoreadmoreaboutthekeyevents shaping Asia’s oil and gas sector, then please click here for NewsBase’s AsianOil Monitor.
downstream cost-cutting and fuel quality
Qatar Petroleum (QP), the world’s biggest LNG producer, says it is cutting costs by 30% in response to the market slump. But it is still mov- ing “full steam ahead” and has a $50bn plan to expand its liquefaction capacity by two thirds by 2027. QP has also ruled out cutting production in response to prices, on the grounds that its low
costs make such a step unnecessary. Meanwhile, a new report suggests that the
petroleum products imported legally into Nige- ria are more polluting and of worse quality than supplies produced at illegal refineries in the Niger delta. A study by the Stakeholder democ- racy Network (SdN) concluded that official samples of gasoline and diesel contained more sulphur than unofficial volumes.
Fuel quality is difficult to control in Nigeria, and SdN’s research suggests that the practice of blaming illegal fuel for air pollution is merely a convenient way to defer responsibility.
In North Africa, Morocco is looking to take advantage of the drop in fuel prices to stock on supplies, using its closed refinery as a storage facility. Meanwhile, Bahrain has reached the halfway point in a $6bn refining upgrade pro- gramme, and the embattled Turkish refiner Tupras has swung to a $353mn loss.
Ifyou’dliketoreadmoreaboutthekeyevents shaping the downstream sector of Africa and the Middle East, then please click here for News- Base’s dMEA Monitor.
european asset sales at risk
North Sea producers are struggling to close deals since oil prices tanked.
France’s Total is working to save its $635mn deal to sell its non-core UK assets after one of its prospective buyers, Oman’s Petrogas, dropped out. The entire portfolio is now expected to go to Norwegian private equity fund HitecVision, which will secure vendor financing from Total to pay for the acquisition.
London-listed Energean Oil & Gas has been less fortunate. It reported on May 19 that the sale of $280mn worth of North Sea assets to regional producer Neptune Energy had collapsed. This could crush Energean’s hopes of completing its $750mn takeover of Italy’s Edison E&P, since the assets due to be sold to Neptune were part of that deal.
UK’s Premier Oil, meanwhile, seems to be having second thoughts about acquiring
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w w w . N E W S B A S E . c o m Week 21 27•May•2020