Page 7 - AsianOil Week 32

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domestic lifting reaches 25-75%. This shows signs of improvement, with the ratio of imports to domestic purchase running into 37% [339,000 bpd] in 2018.”
e government introduced a rule in 2018 requiring all contractors to sell their output to the state-owned oil and gas major. Jakarta wanted to increase Pertamina’s access to local oil production in a bid to reduce imports des- tined for the company’s re neries. e rule exempted contractors’ existing long-term export agreements.
Usman said in July that the company had bought 116,900 bpd crude oil from 37 contrac- tors in the rst half of 2019, an 800% jump on 2018’s full-year average of 12,800 bpd. She added
Petronas Chemicals’ Q2 profit shrinks 22%
that the change had already allowed Pertamina to halt imports of heavy, super heavy, light and medium crude.
e company’s extra purchases of oil from the country’s contractors come as Indonesia’s overall production declines. Oil output shrank by 3.5% y/y to 869,000 bpd in 2018, while consumption expanded by 5.2% to 1.79mn bpd, according to BP’s Statistical Review of World Energy 2019.
Pertamina, for its part, has raised its upstream budget for 2019 to $2.9bn from $2.6bn as it strives to reach a full-year production target of 922,000 barrels of oil equivalent per day (boepd). e com- pany will invest $1.9bn in 98 new upstream devel- opments, while the rest will go towards existing operations as well as exploration.™
PERFORMANCE
MALAYSIA’S state-run Petronas Chemicals saw its second-quarter net pro t shrink by 22% year on year to MYR1.12bn ($267.5mn), compared with MYR1.44bn ($343.9mn) in April-June 2018.
The company’s revenue slid by 8.4% y/y to MYR4.33bn ($1.03bn) from MYR4.73bn ($1.13bn) on lower crude and oil product prices, weaker market demand and the ringgit softening against the US dollar. Profits in the first six months of year fell to MYR1.92bn ($458.6mn) from MYR2.58bn ($616.2mn) in the same period of 2018, while revenue slid to MYR8.47bn ($2.02bn) from MYR9.68bn ($2.31bn).
Petronas Chemicals expects ole n, fertiliser and methanol prices stabilise in the third quar- ter. e company said in a stock exchange ling that operations would primarily be in uenced by global economic conditions, foreign exchange rate movements, facility utilisation rates and oil product prices.
“ e utilisation of our production facilities is dependent on plant maintenance activities and su cient availability of feedstock as well as utilities supply,” the company said. “ e group will continue with its operational excellence pro- gramme and supplier relationship management to sustain plant utilisation level at above [the] industry benchmark.”
e company had said previously that the third quarter would see it conduct turnaround programmes at four plants, which would drag its plant utilisation rate below 90%.
MIDF Research has projected that the pro- grammes will drive the company’s utilisation rate down to 79%, the same level as seen in July-September 2018. It added that the com- pany’s average selling price (ASP) would likely remain fragile in the near term owing to ongo- ing geopolitical tensions that would prompt con- sumers to be more cautious in their purchases.
As part of Petronas Chemicals’ long-term growth plans, the company intends to invest $6bn in acquisitions and partnerships over the next 15-20 years to make high-margin specialty chemicals a core part of its business. e com- pany also intends to spend another $6bn-7bn in expanding its operations at both Pengerang and existing facilities in Kerteh and Kedah over the next 20 years.™
Week 32 14•August•2019 w w w . N E W S B A S E . c o m P7