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Petronas Q2 profits plunge 85 pct on low oil prices

Xinhua, August 22, 2016 Adjust font size:

Malaysia's oil giant Petronas said on Monday that its profits for the second quarter of 2016 posted a 85-percent drop compared with the same period last year, as low oil prices continued to pare back its earnings.

Profits from April to June were down to 1,616 million ringgit (400.8 million U.S. dollars), from last year's 11,067 million ringgit. Its revenue for the period also registered a 21-percent drop, from 61.3 billion ringgit to 48.4 billion ringgit.

Wan Zulkiflee Wan Ariffin, the company's president and chief executive officer, commenced the press conference by describing the first half of 2016 as in a "persistently difficult industry environment," adding the first half remained difficult for the company.

Noting that all oil and gas majors registered a significant drop in financial performances, Wan Zulkifli said Petronas has charted modest growth in Q2 from better overall operational efficiencies, with its Q2 revenue narrowed to a 1-percent drop compared with the first quarter.

Under Wan Zulfiflee, Petronas has taken a series of cost-cutting measures, called "Cost Reduction Alliance 2.0," since oil prices hit the bottom in 2015. He said the state-owned company has realized actual savings amounting to 1.01 billion ringgit as of June 30, bringing the total costs saved since the launch of the initiative to 3.41 billion ringgit.

The company announced layoff of 1,000 jobs early this year. Cuts in capital and expenditures were also exercised in the past two years.

The company may also delay a liquefied-natural gas project in Canada, according to earlier reports. Wan Zulkiflee said the timeframe for the company to make a final decision of the project will be in September or October, when the Canadian government finishes their reviews. Endit