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Last Updated: August 26, 2017
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Kuala Lumpur, 25 August 2017 - PETRONAS today announced strong earnings for the first half of 2017, contributed by higher average realised prices, better margins and boosted by the on-going transformation initiatives to reduce cost and increase efficiency.

The Group's revenue grew to RM108.1 billion, up 15 per cent from RM93.7 billion in the first half of 2016, benefitting from the upward trend of key benchmark prices and foreign exchange rate, but was partially offset by lower sales volume.

Profit after tax (PAT) rose more than a 100 per cent to RM17.3 billion from RM6.4 billion in the corresponding period last year, notably due to higher average realised prices as well as lower net impairment on assets and well costs.

The increase however was partially offset by higher amortisation of oil and gas properties, tax expenses, net foreign exchange losses and costs related to the non-Final Investment Decision (FID) for the Pacific NorthWest LNG (PNW LNG) Project in Canada.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was RM45.2 billion, a 35 per cent increase compared to RM33.6 billion recorded during the same period last year.

The Group's cash flows from operating activities also increased by 55 per cent to RM39.8 billion compared to RM25.6 billion in the same corresponding period in 2016.

Capital investments totalled at RM21.3 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.

Meanwhile year-to-date crude oil, condensate and natural gas entitlement volume was 1,778 thousand barrels of oil equivalent (BOE) per day while total production volume was 2,342 thousand BOE per day.

Total assets decreased to RM596.6 billion as at 30 June 2017 from RM603.4 billion as at 31 December 2016 primarily due to the impact of the strengthening of the Ringgit against the US Dollar.

Shareholders' equity of RM375.8 billion decreased by RM4.6 billion mainly due to the approved dividend of RM13.0 billion for the financial year ended 31 December 2016 and the foreign exchange rate impact, partially offset by profit generated during the period.

Gearing ratio decreased to 17.1 per cent as at 30 June 2017 from 17.4 per cent as at 31 December 2016.

Quarter on quarter, PETRONAS' performance for Q2 of 2017 also improved, largely driven by the upward trend of key benchmark prices and better margins.

PAT was registered at RM7.0 billion compared to RM1.7 billion in Q2 of 2016, a significant improvement mainly due to lower net impairment on assets and well costs, coupled with higher average realised prices recorded across all products. This was partially offset by higher net foreign exchange losses, amortisation of oil and gas properties and non-FID costs for PNW LNG in Canada.

The PAT was posted on the back of a RM 51.6 billion revenue, a 10 per cent increase from RM46.9 billion from the corresponding quarter last year as a result of higher average realised prices and foreign exchange rate impact.

EBITDA increased by 16 per cent to RM20.6 billion from RM17.8 billion in the corresponding quarter last year.

The Group's cash flows from operations also grew by 37 per cent to RM21.8 billion from RM15.9 billion in the corresponding quarter last year due to higher average realised prices.

Outlook

Despite higher prices compared to a year ago, the industry remains volatile tempering the company's optimism. PETRONAS continues to focus on internal transformation initiatives, effective cash management and cost optimisation.

The Board expects the overall year-end performance of PETRONAS Group to be fair.

Datuk Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS

'We have closed out the first half of the year with stronger financials compared to the same period in 2016. While the price of oil was a significant factor, I also view this as tangible results of PETRONAS' transformation measures taken in response to the industry downturn. And I attribute this to the employees of PETRONAS. They continue to drive impactful changes, which create ripple effects that, as you can see, have positively improved the bottom-line.'

Operational Highlights

Upstream

• PETRONAS has made significant progress in re-basing its cost in the Upstream business. In 2017, PETRONAS expects further reduction in unit production cost to an average of US$6.8 per barrel through efficiency across its value chain.

• The total production volume for the first half of 2017 was 2,342 thousand BOE per day compared to 2,391 thousand BOE per day in the corresponding period last year. This was mainly due to lower Iraq production entitlement, lower activities in Canada and higher decline rate in the Malaysia-Thai Joint Development AREA and Egypt, partially offset by the increase in production in the MLNG supply system. Five new and infill projects were brought on-stream in the second quarter of 2017, contributing to 44,000 barrels equivalent per day of production. Total production entitlement improved to 1,778 thousand BOE from 1,731 thousand BOE in the corresponding period.

• LNG sales recorded a two per cent increase in volume compared to the corresponding period last year, mainly attributable to the higher volume from Train 9 and Egyptian LNG. In addition, the PFLNG Satu has delivered two cargoes to India and Taiwan, respectively.

• Despite the decision not to proceed with the PNW LNG project, PETRONAS remains committed to monetise the natural gas resources in the North Montney area in Canada. At 22.3 trillion cubic feet of proven resources, Canada holds the second largest gas resources in PETRONAS' portfolio after Malaysia. To-date, Progress Energy Canada Ltd, a wholly owned subsidiary of PETRONAS, is producing around 540 million standard cubic feet of gas per day to the domestic market, generating revenue of CA$261 million (approximately RM861 million) for the first two quarters in 2017.

• As part of the company's portfolio high-grading efforts, PETRONAS has decided to divest its position in Algeria and not to proceed with the extension of the Block 1 and 2 Production Sharing Contract in Vietnam. In addition, PETRONAS has secured a third exploration block in Mexico, namely Block 6, in the recently concluded bid round. To-date, PETRONAS has accumulated a total of 5,491 sq kms of exploration acreages in the highly prospective Mexico offshore blocks.

Downstream

• For the first half of 2017, Downstream business recorded an increase in PAT attributable to better petrochemical product spreads as well as higher trading and marketing margins.

• Higher volume recorded from petrochemicals was 4.0 MMT for the first half of 2017 compared to 3.5 MMT in the corresponding period last year, following the commissioning of PETRONAS Chemical Fertiliser Sabah Sdn Bhd (also known as SAMUR) further supported Petrochemical business in capturing favourable products spreads.

• Healthy trading and marketing margin for Crude and Petroleum products mainly driven by focused trading strategies towards high-value activities.

• PETRONAS' key downstream project continues to progress well with the Pengerang Integrated Complex (PIC) project achieving 70 per cent completion at 30 June 2017 with seven per cent progress during the second quarter of 2017.

• PETRONAS, through its lubricants business unit, the PETRONAS Lubricants Marketing (Malaysia) Sdn Bhd has successfully secured a four-year Supply Contract Renewal from Mercedes Benz through Cycle and Carriage Bintang Berhad.

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The Australian 590 Student Guardian Visa Process In A Nutshell

Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590

Step By Step Process About 590 Visa

1.Before Applying for Visa

Meet Eligibility Criteria

    • You must be a parent or grandparents or relative of a non-Australian child who is below 18th of age.

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August, 21 2019
TODAY IN ENERGY: The U.S. leads global petroleum and natural gas production with record growth in 2018

U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world's largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world's largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.

For the United States and Russia, petroleum and natural gas production is almost evenly split; Saudi Arabia's production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The United States produced 28.7 quadrillion British thermal units (quads) of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs.

estimated petroleum and natural gas production in selected countries

Source: U.S. Energy Information Administration, based on International Energy Statistics
Note: Petroleum includes crude oil, condensate, and natural gas plant liquids.

U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production. The United States also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.

U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d), or 31.5 quadrillion Btu, reaching a new record high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production.

Russia’s crude oil and natural gas production also reached record levels in 2018, encouraged by increasing global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD). Russia’s crude oil is also an important source of supply to China and neighboring countries.

Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal liquefied natural gas (LNG) export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas annually and accounts for almost all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of Russia’s natural gas exports have been sent to Europe.

Saudi Arabia’s annual average crude oil production increased slightly in 2018, but it remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high. Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts.

In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi Arabian crude oil consumption highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdraw of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas.

Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the United States remain critical markets for Saudi Arabia’s petroleum exports.

August, 21 2019
Your Weekly Update: 12 - 16 August 2019

Market Watch 

Headline crude prices for the week beginning 12 August 2019 – Brent: US$58/b; WTI: US$54/b

  • Saudi Arabia’s overtures to further stabilise prices was met with a largely positive response by the market, allowing crude prices to claw back some ground after being hammered by demand concerns
  • Saudi officials reportedly called other members in the OPEC and OPEC+ producer clubs to discuss options on how to stem the recent rout in prices, with an anonymous official quoted as saying that it ‘would not tolerate continued price weakness’
  • Reports suggest that Saudi Arabia plans to keep its oil exports at below 7 mmb/d in September according to sales allocations, which was seen as a stabilising factor in crude price trends
  • This came after crude prices fell as the US-China trade war entered a new front, causing weakness in the Chinese Yuan, although President Trump has floated the idea of delaying the new round of tariffs beyond the current implementation timeline of September 1
  • Crude had also fallen in response to a slide in American crude oil stockpiles and a receding level of tensions in the Persian Gulf
  • In a new report, the International Energy Agency said that the outlook for global oil demand is ‘fragile’ on signs of an economic slowdown; there is also concern that China will target US crude if the US moves ahead with its tariff plan
  • The US active rig count lost another 8 rigs – 6 oil and 2 gas – the sixth consecutive weekly loss that brought the total number of active rigs to 934
  • Demand fears will continue to haunt the market, which will not be offset so easily of Saudi-led efforts to limit production; as a result, crude prices will trade rangebound with a negative slant in the US$56-58/b range for Brent and US$52-54/b for WTI


Headlines of the week

Upstream

  • Nearly all Anadarko shareholders have approved the Occidental Petroleum deal, completing the controversial takeover bid despite investor Carl Icahn’s attempts to derail the purchase
  • Crude oil inventories in Western Canada have fallen by 2.75 million barrels m-o-m to its lowest level since November 2017, as the production limits in Alberta appear to be doing their job in limiting a supply glut while output curbs are slowly being loosened on the arrival of more rail and pipeline capacity
  • Mid-sized Colorado players PDC Energy and SRC Energy – both active in the Denver-Julesburg Basin – are reportedly in discussion to merge their operations
  • Pemex has been granted approval by the National Hydrocarbon Commission to invest US$10 billion over 25 years to develop onshore and offshore exploration opportunities in Mexico
  • Qatar Investment Authority has acquired a ‘significant stake’ in major Permian player Oryx Midstream Services from Stonepeak Infrastructure Partners for some US$550 million, as foreign investment in the basin increases
  • PDVSA and CNPC’s Venezuelan joint venture Sinovensa has announced plans to expand blending capacity – lightening up extra-heavy Orinoco crude to medium-grade Merey – from a current 110,000 b/d to 165,000 b/d
  • BHP has approved an additional US$283 million in funding for the Ruby oil and gas project in Trinidad and Tobago, with first production expected in 2021
  • CNPC, ONGC Videsh and Petronas have reportedly walked away from their onshore acreage in Sudan, blaming unpaid oil dues on production from onshore Blocks 2A and 4 that have already reached more than US$500 million

Midstream/Downstream

  • Expected completion of Nigeria’s huge planned 650 kb/d Dangote refinery has been delayed to the end of 2020, with issues importing steel and equipment cited
  • Saudi Aramco’s US refining arm Motiva announced plans to shut several key units at its 607 kb/d Port Arthur facility in Texas for a 2-month planned maintenance, affecting its 325 kb/d CDU and the naphtha processing plant
  • ADNOC has purchased a 10% stake in global terminal operator VTTI, expanding its terminalling capacity in Asia, Africa and Europe
  • A little-known Chinese contractor Wison Engineering Services has reportedly agreed to refurbish Venezuela’s main refineries in a barter deal for oil produced, in a bid for Venezuela to evade the current US sanctions on its crude exports
  • Swiss downstream player Varo Energy will increase its stake in the 229 kb/d Bayernoil complex in Germany to 55% after purchasing BP’s 10% stake
  • India has raised the projected cost estimate of its giant planned refinery in Maharashtra – a joint venture between Indian state oil firms with Saudi Aramco and ADNOC – to US$60 billion, after farmer protests forced a relocation

Natural Gas/LNG

  • The government of Australia’s New South Wales has given its backing to South Korea’s Epik and its plan to build a new LNG import terminal in Newcastle
  • Kosmos Energy is proposing to build two new LNG facilities to tap into deepwater gas resources offshore Mauritania and Senegal under development
  • In the middle of the Pacific, the French territory of New Caledonia has started work on its Centrale Pays Project, a floating LNG terminal with an accompanying 200-megawatt power plant, with Nouvelle-Caledonia Energie seeking a 15-year LNG sales contract for roughly 200,000 tons per year
August, 16 2019