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Petronas warns of challenging fourth quarter amid volatile oil prices

November 30/2020

MOSCOW (MRC) -- Malaysian state-owned energy giant Petronas warned on Friday that the remainder of the year would remain tough due to prolonged low oil prices and moderate demand recovery hampered by the coronavirus, as it recorded a third-quarter loss, reported Reuters.

Amid the fluid operating environment brought about by the pandemic as well as prolonged volatility of oil prices, Petronas is adopting a cautious outlook and anticipates that the remainder of 2020 will be challenging, said Tengku Muhammad Taufik, president and group chief executive officer.

We expect our performance to be continuously affected by the volatility of oil prices aggravated by the ongoing COVID-19 pandemic, he said in a statement.

Petronas, or Petroliam Nasional Berhad, said it would continue to uphold disciplined capital and operational spending and preserve liquidity to ensure business sustainability.

The worlds fourth-biggest LNG exporter said its Pengerang Integrated Complex (PIC) will be operational by early next year, with the Atmospheric Residue Desulphurisation Train 1 and Train 2 expected to be ready-for-start-up (RFSU) by the beginning of 2021.

The Diesel Hydro Treating unit is expected to be RFSU in the fourth quarter of 2021, while the restart-up of the Refinery and Petrochemical plants is planned for the first quarter, the firm said.

Petronas reported a post-tax loss of 3.4 billion ringgit ($835.8 million) for the July to September period, against 7.4 billion ringgit in the same quarter last year.

Its second straight quarterly loss was attributed to a higher impairment loss on assets and higher tax expenses as a result of the lower oil and gas price outlook.

Revenue fell 25% to 41.1 billion ringgit.

As MRC reported earlier, in June 2019, Malaysian state oil company Petroliam Nasional Bhd, or Petronas, and Saudi Aramco started operations at their new 1.2-million-tonnes-per-year naphtha cracker. The cracker is part of the USD2.7 billion joint-venture oil refinery and petrochemical project known as RAPID - or Refinery and Petrochemical Integrated Development - located in Pengerang in the state of Johor, at the southern tip of peninsular Malaysia.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, Petronas, Saudi Aramco, Malaysia, Russia.
Category:General News
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