Page 6 - AfrOil Week 21 2020

AfrOil NEWSBASE’S ROUNDUP GLOBAL (NRG) AfrOil
NRG: Signs of cautious optimism
Producers and investors remain cautious, as the coronavirus pandemic continues to affect energy demand, but are starting to plan for the post-crisis period
COMMENTARY
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World crude oil prices have continued to show signs of recovery over the last week. Brent crude prices have moved above $35 per barrel, while WTI is not far behind. Nevertheless, producers and investors remain cautious, owing to concerns about the impact of the coronavirus (COVID-19) pandemic.
Even so, they are also starting to plan for the post-crisis period. In several regions, they are exploring their options for expanding processing and transport infrastructure and are looking for- ward to a recovery in demand.
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.
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