Page 9 - FSUOGM Week 21

FSUOGM N R G FSUOGM
The GNA has started to made progress in its military campaign against the LNA, but it will probably have a hard time restarting production at major oilfields such as El-Feel and Sharara.
If you’d like to read more about the key events shaping Africa’s oil and gas sector then please click here for NewsBase’s AfrOil Monitor.
Asian NOC under pressure
The last of Southeast Asia’s state-owned upstream heavyweights has bowed to the pres- sure of lower oil prices, announcing plans to slash its spending while warning that short-term production will fall.
Malaysian national oil company (NOC) Pet- ronas said on May 22 that it would cut its 2020 capital expenditure budget by 21% from an initial estimate of MYR50bn ($11.46bn). The announcement came around two and a half months after the company insisted that the oil price crash would not derail its upstream spend- ing plans.
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.
If you’d like to read more about the key events 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.
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