Sunday 24 June 2018

Petronas plans $91bn capex over 5years

Kuala Lumpur, March 2, 2011

Malaysia's Petronas  could spend up to MR275 billion ($90.6 billion) over the next five years as the state oil giant seeks to boost its stable of high-yielding oil assets and secure profit growth, its chief said on Wednesday.

Petronas joins firms such as ExxonMobil in planning to raise capital expenditure, spurred by high crude prices and energy demand recovering with the global economy, even as it warned about volatile oil that could stay above $100 on the Middle East turmoil and its impact on inflation.

Annual capital spending of the company, which manages Malaysia's energy reserves, will range from MR50 billion to MR55 billion over the next five years, up from MR40 billion in the current fiscal year, Petronas chief executive Shamsul Azhar told reporters on Wednesday.

'If we do not grow, we will become irrelevant,' Shamsul told reporters after announcing the firm's strong third-quarter results. 'For the next five years, our capital expenditure is going to be higher. All those ageing assets need to replaced.'

As a result, the firm's dividend payouts to the government may not increase from the MR30 billion level despite higher oil prices, Shamsul said, signalling Petronas was racing to keep up with other oil majors in terms of capital outlays.

In the year to March 2010 it kicked in MR57.6 billion to federal revenues in terms of dividends and taxes. It's debt is more highly rated than the sovereign state, leading analysts to dub Malaysia as a 'subsidiary of Petronas.'

Petronas reported a 74 per cent jump in third-quarter net profit on strong demand and one-off gains from the listings of its units, but Shamsul cautioned oil prices will stay volatile in view of the Middle East unrest.-Reuters

Tags: Petronas | malaysia | Crude | fuel | oil major |


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