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Petronas to double capex to $14 billion on project ‘catch-up’

© BloombergPetrona is planning to sanction the Kasawari Phase 2 project in Malaysia this year
Petrona is planning to sanction the Kasawari Phase 2 project in Malaysia this year

Malaysia’s national oil company Petroliam Nasional Bhd. plans to double its capital expenditure to 60 billion ringgit ($14 billion) this year from 2021, as business activities normalize following the lifting of Covid-era restrictions.

Many of its projects were delayed due to the pandemic and “there’s a lot of catch-up that’s happening this year,” Group Chief Financial Officer Liza Mustapha said in a conversation with MIDF Group’s Managing Director Charon Wardini Mokhzani on Thursday.

Petronas expects to post a “triple-digit” growth in revenue this year amid high oil prices, Liza said. Its first-quarter profit more than doubled to 23.4 billion ringgit from a year earlier on the back of a 50% jump in revenue.

Still, elevated oil prices may not be “very sustainable,” Liza said. “It can go up as quickly as it can come down.”

Brent crude surged past $124 a barrel on Thursday, taking this year’s gain to almost 60%, as economies rebounded from the pandemic and Russia’s invasion of Ukraine upended trade flows and led to further tightening.

Petronas is basing its projects at prices of $50-$60 per barrel, she said. The firm is also looking to get “quite a sizable chunk” of its revenue from non-oil and gas over the next five to six years.

“We talk about how do we make inroads into the hydrogen space, how do we make inroads into renewable space and for Petronas, predominantly, it’s wind and solar, and adjacent to that is also how we can be involved in green mobility,” she said.

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