Petronas Q1 profit up 61pc, sees weaker Q2
UPDATED @ 05:39:37 PM 31-05-2012
KUALA LUMPUR, May 31 — Petronas reported a first quarter net profit of RM20.7 billion today, 61.7 per cent higher than the same period last year thanks to high crude oil prices.
The national oil company said however that it expects lower crude oil prices to hurt second quarter results as prices have fallen from about US$130 in the first quarter to US$106 today due to demand destruction stemming from the Euro crisis.
Petronas CEO Datuk Shamsul Azhar Abbas said that Petronas has based its plans for the rest of the year on oil prices at about US$87 per barrel.
He said that several other factors would hit oil prices including the displacement of African and Middle East oil from the US market as it starts exporting petroleum products, and higher petroleum output in Saudi Arabia
"A lot of the oil displaced from the US market will go elsewhere so I am fairly bearish," he said. "Q1 came as a surprise. Q2 will not be as good as Q1."
Shamsul added that Petronas also expects to take a RM3.2 billion hit to its bottom line from the shutdown of its oil production facilities in Sudan due to ongoing political instability.
The shutdown means a loss of production of 130,000 barrels per day and Shamsul said that he doesn't expect that the production will resume in Sudan before the end of the year.
The Petronas CEO said that the company will also know the outcome of oil exploration efforts in Cuba by the end of June.
The exploration involves a 45 day joint drilling exercise with Gazprom on a 80:20 basis off Cuba.
Petronas first quarter revenue rose 15 per cent to RM75.2 billion from RM65.6 billion the same period last year.
Its net margin also rose from 19.5 per cent to 27.5 per cent.
Petronas said that hydrocarbon production in Malaysia declined from 1,666 thousand barrels of oil equivalent per day (kboed) last year to 1,641 kboed due to natural field depletion, poor reservoir performance and operational challenges.