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Asia: Petronas may shelve 2020 dividend regard to the current position, I do not want to
After posting a first-half net loss of MYR16.5bn pursue the path of retrenchment or layoffs. We
($3.97bn), Malaysia’s state-owned Petronas has have to share the pain.”
warned the government that it could struggle to
pay this year’s annual dividend. If you’d like to read more about the key events shaping
Petronas will review the “affordability” of Asia’s oil and gas sector then please click here for
such a payment following the release of its NewsBase’s AsianOil Monitor.
fourth-quarter results, company president and
CEO Tengku Muhammad Taufik Tengku Aziz DMEA: Iraq stays the course
said on September 4. Iraq may be a key Middle Eastern oil producer,
“Our dividend payout is governed by our but after years of conflict and under-investment,
affordability and will need to take into account it lacks the refining capacity to meet domestic
our business-as-usual capex and immediate fuel demand. As a result, it typically chalks up a
financial obligations,” Taufik said at Petronas’ $2.5bn annual bill for imports of gasoline, diesel
first-half results briefing. “Our year-end results and other key oil products.
would be the guidance to set the expectation. The country has a number of new refining
That dialogue will continue as this industry projects in the works, but many of them are at an
is volatile and, like other oil and gas compa- early stage of development. In fact, given the eco-
nies, shareholders will tend to not see so much nomic crisis Iraq is facing, these schemes seem
returns.” more like a wish list than a concrete programme
Petronas’ dividend was MYR24bn ($5.77bn) for developing the sector.
in 2019, but 2020 is proving to be a much more However, the country is making tangible pro-
challenging year, owing to the COVID-19 pan- gress in some areas. Last month it hired Japan’s
demic. The state major’s first-half revenue shrank JGC to build various new processing units at the
by 23% to MYR93.6bn ($22.52bn), down from Shuaiba oil refinery for $3.75bn. In late August,
MYR121.1bn ($29.13bn) a year earlier, as a result Iraq’s Oil Ministry also ordered the capacity of
of the collapse of oil and gas prices and sales vol- the Sumood refinery to be raised to 140,000 bar-
umes in the second quarter. Petronas posted a rels per day (bpd) within months, from 75,000
MYR21bn ($5.05bn) net loss in April-June, after bpd at present. At a later stage, its output will
recording a MYR14.7bn ($3.54bn) net profit in reach 280,000 bpd.
the same period of 2019. Second-quarter reve- The plant was significantly damaged during
nue, meanwhile, tumbled 42% y/y to MYR34bn the ISIS invasion and occupation, and again
($8.18bn) from MYR59.1bn ($14.22bn). when it was retaken by Iraqi forces. Iraq plans to
Taufik said that while the pandemic had restore its output by modernising and repairing
placed additional financial pressure on the its processing trains.
government, the board had to review Petronas’ Meanwhile Baghdad has not given up on
finances before committing to any payment. He longstanding plans to build a $8bn petrochemi-
then noted that the board was contemplating cal complex in Nibras. The Oil Ministry said on
a company-wide salary cut in order to avoid August 31 that a final agreement on the venture
redundancies. with Royal Dutch Shell would be signed before
“We have explored possible [cost-cutting] the end of the year, despite market challenges.
options. We also want to be a responsible man-
agement,” the executive said. He added: “As such, If you’d like to read more about the key events shaping
we would not take this decision lightly and we the downstream sector of Africa and the Middle East,
will deliberate on all possible options. With then please click here for NewsBase’s DMEA Monitor.

Week 36 09•September•2020 www. NEWSBASE .com P7