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(Adds CEO comments, background) KUALA LUMPUR, March 2 (Reuters) - Malaysian state energy firm Petroliam Nasional Berhad , or Petronas, posted a 61 percent jump in quarterly profit on Friday and pledged to boost its dividend payout and capital spending this year. Petronas, like other oil majors, had taken a hit from lower oil prices, but sharp cost cuts - along with some recent stability in oil prices - helped the company post higher profits and margins. Net profit for the fourth quarter ended December rose to 18.2 billion ringgit ($4.65 billion) from 11.3 billion ringgit in the same quarter last year, while revenue rose 13.8 percent to 61.8 billion ringgit.
The quarterly result helped push full-year profit up 91 percent to 45.5 billion ringgit - marking a second year of profit growth for the sole manager of Malaysia's oil and gas reserves following a two-year profit slump. "Petronas is now in stronger position to execute its long term growth agenda," Chief Executive Wan Zulkiflee Wan Ariffin said. "Petronas will explore new business areas, including speciality chemicals and new energy." Petronas will focus on the ASEAN region, the Indian subcontinent, the Middle East and the Americas for growth, he said, adding that the company will assess opportunities in solar energy. Wan Zulkiflee said the company will continue its focus on costs. Petronas, a major contributor to Malaysia's budget and one of the country's biggest employers, said in 2016 that it would reduce expenses by $12 billion over a four-year period and cut thousands of jobs. The company, known to be conservative with its outlook, said its performance in 2018 will be "satisfactory" subject to sustainability of the oil price. It is budgeting for an oil price of $52 per barrel in 2018. Wan Zulkiflee said Petronas is committed to pay a dividend of 19 billion ringgit to its sole shareholder, the Malaysian government, this year compared with 16 billion ringgit last year. It also plans capital expenditure of around 55 billion ringgit, higher than last year's 44.5 billion ringgit.
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In its January 2021 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) expects that energy-related carbon dioxide (CO2) emissions in the United States will increase in 2021. Economic growth and the lessening of pandemic-related restrictions result in more energy consumption and associated CO2 emissions. EIA expects total energy-related CO2 emissions to increase to 4.8 billion metric tons in 2021 and 4.9 billion metric tons in 2022.
U.S. energy-related CO2 emissions fell by an estimated 11% in 2020, largely because of reduced travel and other factors that have led to less energy consumption during the COVID-19 pandemic. In the short term, EIA forecasts rising CO2 emissions as a result of economic recovery from the COVID-19 pandemic, changes in fuel mix, and greater demand for residential electricity as colder winter weather leads to more heating demand in 2021.
EIA expects petroleum to account for about 46% of total U.S. energy-related CO2 emissions in 2021 and 47% of total energy-related CO2 emissions in 2022. Most of these emissions come from the transportation sector as a result of increased travel as the economy recovers from the effects of the COVID-19 pandemic.
EIA expects natural gas, which accounted for about 36% of total energy-related CO2 emissions in 2020, to decline to about 34% of total emissions in 2021. Emissions from natural gas are declining mainly because natural gas consumption is declining as natural gas prices increase relative to coal prices. EIA expects natural gas prices to increase by 98 cents per million British thermal units (MMBtu) in 2021 while prices for coal increase by 12 cents/MMBtu. As a result, EIA forecasts that natural gas’s share of total energy-related CO2 emissions will decline to 32% in 2022 as natural gas prices rise.
Coal accounted for 19% of total U.S. energy-related CO2 emissions in 2020. EIA expects this share of total emissions to rise to 21% in 2021 and 2022 as coal becomes more economical for use in electricity generation amid higher natural gas prices.
More information on EIA’s forecasts is available in the January Short-Term Energy Outlook.
The LG XBOOM Go PL2 is the smallest and least expensive offering in LG's latest speaker trio including larger PL7 and PL5 models. All three models share the same design language and all have Meridian-tuned audio.
LG XBOOM PL2 is portable, small and light enough to be transported easily and offers 10 hours of battery life so it can run almost for a full day without being plugged in.
Ratings: 7.2
+ IPX5 water resistant
+ Easy to setup and use
+ Meridian tuned sound
- No integrated voice assistant
- No EQ adjustments
The LG XBOOM PL2 has IPX5 splash proof rating, which means it can withstand being sprayed with water but should not be submerged. We ran it under a faucet for a few seconds and the speaker kept working as it should.
The PL2 is based on version 5.0 of the Bluetooth standard and the range is quite similar to that of other speakers in the same price range. It can remain connected to more than 25 feet indoors from the audio source.
Two acquisitions in the energy sector were announced in the last week that illustrate the growing divergence in approaching the future of oil and gas between Europe and the USA. In France, Total announced that it had bought Fonroche Biogaz, the market leader in the production of renewable gas in France. In North America, ConocoPhillips completed its acquisition of Concho Resources, deepening the upstream major’s foothold into the lucrative Permian Basin and its shale riches. One is heading towards renewables, and the other is doubling down on conventional oil and gas.
What does this say about the direction of the energy industry?
Total’s move is unsurprising. Like almost all of its European peers operating in the oil and gas sector, Total has announced ambitious targets to become carbon-neutral by 2050. It is an ambition supported by the European population and pushed for by European governments, so in that sense, Total is following the wishes of its investors and stakeholders – just like BP, Shell, Repsol, Eni and others are doing. Fonroche Biogaz is therefore a canny acquisition. The company designs, builds and operates anaerobic digestion units that convert organic waste such as farming manure into biomethane to serve a gas feedstock for power generation. Fonroche Biogaz already has close to 500 GWh of installed capacity through seven power generation units with four in the pipeline. This feeds into Total’s recent moves to expand its renewable power generation capacity, with the stated intention of increasing the group’s biomethane capacity to 1.5 terawatts per hour (TWh) by 2025. Through this, Total vaults into a leading position within the renewable gas market in Europe, which is already active through affiliates such as Méthanergy, PitPoint and Clean Energy.
In parallel to this move, Total also announced that it has decided not to renew its membership in the American Petroleum Institute for 2021. Citing that it is only ‘partially aligned’ with the API on climate change issues in the past, Total has now decided that those positions have now ‘diverged’ particularly on rolling back methane emission regulations, carbon pricing and decarbonising transport. The French supermajor is not alone in its stance. BP, which has ditched the supermajor moniker in favour of turning itself into a clean energy giant, has also expressed reservations over the API’s stance over climate issues, and may very well choose to resign from the trade group as well. Other European upstream players might follow suit.
However, the core of the API will remain American energy firms. And the stance among these companies remains pro-oil and gas, despite shareholder pressure to bring climate issues and clean energy to the forefront. While the likes of ExxonMobil and Chevron have balanced significant investments into prolific shale patches in North America with public overtures to embrace renewables, no major US firm has made a public commitment to a carbon-neutral future as their European counterparts have. And so ConocoPhillips acquisition of Concho Resources, which boosts its value to some US$60 billion is not an outlier, but a preview of the ongoing consolidation happening in US shale as the free-for-all days give way to big boy acquisitions following the price-upheaval there since 2019.
That could change. In fact, it will change. The incoming Biden administration marks a significant break from the Trump administration’s embrace of oil and gas. Instead of opening of protected federal lands to exploration, especially in Alaska and sensitive coastal areas and loosening environmental regulations, the US will now pivot to putting climate change at the top of the agenda. Although political realities may water it down, the progressive faction of the Democrats are pushing for a Green New Deal embracing sustainability as the future for the US. Biden has already hinted that he may cancel the controversial and long-running Keystone XL pipeline via executive order on his first day in the office. His nominees for key positions including the Department of the Interior, Department of Energy, Environmental Protection Agency and Council on Environmental Quality suggest that there will be a major push on low-carbon and renewable initiatives, at least for the next 4 years. A pledge to reach net zero fossil fuel emissions from the power sector by 2035 has been mooted. More will come.
The landscape is changing. But the two approaches still apply, the aggressive acceleration adopted by European majors, and the slower movement favoured by US firms. Political changes in the USA might hasten the change, but it is unlikely that convergence will happen anytime soon. There is room in the world for both approaches for now, but the future seems inevitable. It just depends on how energy companies want to get there.
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