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New Straits Times
6 days ago
- Business
- New Straits Times
Petronas potential sale reflects broader trend
KUALA LUMPUR: Petroliam Nasional Bhd's (Petronas) potential sale of its stake in an oilfield in Brazil reflects a broader trend among state-owned oil and gas companies to streamline their global portfolios, economists said. The potential divestment, which could raise about US$1 billion (RM4.23 billion), comes as Petronas continues to reshape its international upstream portfolio in line with long-term strategic priorities and shifting global energy dynamics, they added. It was reported that the national oil company was working with Bank of America Corp to market its 50 per cent stake in the offshore deepwater oilfield in Brazil's Campos Basin. The Tartaruga Verde field is operated by Brazil's national oil company Petrobras, which owns the remaining 50 per cent. Economist Samirul Ariff Othman said Petronas is in the midst of restructuring its upstream portfolio to boost resilience, prioritise value creation and ensure long-term sustainability in the face of market and geopolitical uncertainties. The strategy involves focusing on assets with strong break-even economics while minimising the group's presence in regions with elevated risk. "In recent years, the company has prioritised monetising non-core assets and reinvesting in areas aligned with its long‑term strategy, including unconventional resources in Argentina and Canada, and focused conventional assets in Brazil, Mexico, Turkmenistan, Iraq and Vietnam. "Selling the 50 per cent stake reflects this approach: monetising an offshore minority interest acquired in 2019, freeing capital for re-investment in more core or higher-return geographies," he told Business Times. Samirul said the national oil and gas company has been steadily withdrawing from non-core or higher-risk international assets as part of its portfolio optimisation strategy. "Ongoing divestments across Africa, including exits from Chad and South Sudan, align with re-focusing efforts. "Earlier moves included exiting Venezuela and underperforming European ventures, emphasising a pivot toward higher-grade, lower-risk upstream opportunities," he added. He added that the move to divest the Brazil stake aligns with Petronas' long-term strategy of shedding non-core offshore assets in order to redirect capital towards key operations and minimise geopolitical or operational risks. Samirul said the reported Petronas move to engage Bank of America to market its Tartaruga Verde stake reflects its ongoing strategic shift, streamlining its upstream portfolio in line with the 2024-2026 Activity Outlook, while redirecting capital toward assets with better break-even performance and stronger alignment with its Net Zero 2050 goals. Similarly, Universiti Teknologi Mara Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said Petronas' potential exit from the Brazilian asset is consistent with a wider realignment seen across the oil and gas industry. "This divestment aligns with strategic shifts aimed at reallocating resources towards more lucrative or strategically aligned assets. "The Brazilian offshore asset, while potentially profitable, might present operational challenges or uncertainties such as geopolitical risks, currency fluctuations, or regulatory complexities that make it a candidate for divestment," Idham said when contacted. He said the move could form part of a wider strategy to restructure Petronas' portfolio in line with global energy transition trends, potentially unlocking capital for renewable energy investments or higher-yield hydrocarbon projects in other regions. "Petronas' potential exit from international assets, such as the Tartaruga Verde oilfield, could be indicative of a strategic refocusing or a risk-aversion strategy in response to the evolving global energy landscape. "This trend might reflect a broader industry recalibration where companies, in the wake of the pandemic's economic impact and shifting towards cleaner energy sources, are divesting from assets that are either less profitable or do not align with their long-term strategic objectives," he added. Idham said this could be part of a larger trend of asset reallocation to support domestic energy security and decarbonisation efforts. "However, this does not necessarily imply a complete retreat from international ventures, as state-owned enterprises often have mandates to secure energy resources globally, and strategic disinvestments could be offset by new investments or partnerships in more geopolitically stable or strategically important regions," he explained.
New Straits Times
6 days ago
- Business
- New Straits Times
Potential sale reflects broader trend
KUALA LUMPUR: Petroliam Nasional Bhd's (Petronas) potential sale of its stake in an oilfield in Brazil reflects a broader trend among state-owned oil and gas companies to streamline their global portfolios, economists said. The potential divestment, which could raise about US$1 billion (RM4.23 billion), comes as Petronas continues to reshape its international upstream portfolio in line with long-term strategic priorities and shifting global energy dynamics, they added. It was reported that the national oil company was working with Bank of America Corp to market its 50 per cent stake in the offshore deepwater oilfield in Brazil's Campos Basin. The Tartaruga Verde field is operated by Brazil's national oil company Petrobras, which owns the remaining 50 per cent. Economist Samirul Ariff Othman said Petronas is in the midst of restructuring its upstream portfolio to boost resilience, prioritise value creation and ensure long-term sustainability in the face of market and geopolitical uncertainties. The strategy involves focusing on assets with strong break-even economics while minimising the group's presence in regions with elevated risk. "In recent years, the company has prioritised monetising non-core assets and reinvesting in areas aligned with its long‑term strategy, including unconventional resources in Argentina and Canada, and focused conventional assets in Brazil, Mexico, Turkmenistan, Iraq and Vietnam. "Selling the 50 per cent stake reflects this approach: monetising an offshore minority interest acquired in 2019, freeing capital for re-investment in more core or higher-return geographies," he told Business Times. Samirul said the national oil and gas company has been steadily withdrawing from non-core or higher-risk international assets as part of its portfolio optimisation strategy. "Ongoing divestments across Africa, including exits from Chad and South Sudan, align with re-focusing efforts. "Earlier moves included exiting Venezuela and underperforming European ventures, emphasising a pivot toward higher-grade, lower-risk upstream opportunities," he added. He added that the move to divest the Brazil stake aligns with Petronas' long-term strategy of shedding non-core offshore assets in order to redirect capital towards key operations and minimise geopolitical or operational risks. Samirul said the reported Petronas move to engage Bank of America to market its Tartaruga Verde stake reflects its ongoing strategic shift, streamlining its upstream portfolio in line with the 2024-2026 Activity Outlook, while redirecting capital toward assets with better break-even performance and stronger alignment with its Net Zero 2050 goals. Similarly, Universiti Teknologi Mara Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said Petronas' potential exit from the Brazilian asset is consistent with a wider realignment seen across the oil and gas industry. "This divestment aligns with strategic shifts aimed at reallocating resources towards more lucrative or strategically aligned assets. "The Brazilian offshore asset, while potentially profitable, might present operational challenges or uncertainties such as geopolitical risks, currency fluctuations, or regulatory complexities that make it a candidate for divestment," Idham said when contacted. He said the move could form part of a wider strategy to restructure Petronas' portfolio in line with global energy transition trends, potentially unlocking capital for renewable energy investments or higher-yield hydrocarbon projects in other regions. "Petronas' potential exit from international assets, such as the Tartaruga Verde oilfield, could be indicative of a strategic refocusing or a risk-aversion strategy in response to the evolving global energy landscape. "This trend might reflect a broader industry recalibration where companies, in the wake of the pandemic's economic impact and shifting towards cleaner energy sources, are divesting from assets that are either less profitable or do not align with their long-term strategic objectives," he added. Idham said this could be part of a larger trend of asset reallocation to support domestic energy security and decarbonisation efforts. "However, this does not necessarily imply a complete retreat from international ventures, as state-owned enterprises often have mandates to secure energy resources globally, and strategic disinvestments could be offset by new investments or partnerships in more geopolitically stable or strategically important regions," he explained.
New Straits Times
21-05-2025
- Business
- New Straits Times
Perdana Petroleum posts net loss of RM18mil in Q1
KUALA LUMPUR: Perdana Petroleum Bhd slipped into the red with a net loss of RM18 million in the first quarter of financial year 2025 (1QFY25) from a net profit of RM6 million a year earlier. This is due to lower revenue and lower contribution from third party vessel chartering and marginally increase in vessels direct costs, according to its filing with Bursa Malaysia today. Perdana Petroleum said vessels direct cost remains high despite the lower utilisation rate, due to the costs incurred in getting the vessels ready for long-term contract with oil majors that require higher standards. Its revenue fell 62 per cent to lower vessel utilisation rates of 31 per cent as compared to 62 per cent achieved a year ago, as well as lower third-party vessels chartering from RM36.7 million to RM7.9 million. In a statement, Perdana managing director Jamalludin Obeng said the first quarter marked a transitional period for the company, as it focused on investing in vessel readiness to meet the stringent requirements of an upcoming long-term charter. "The quarter was also marked with low vessel utilisation as there was a lack of project spillovers, coupled with slower offshore activities. "Although the year began slowly, we remain cautiously optimistic of an uptick in utilisation as the offshore market gradually strengthens," he said. Jamalludin said the global energy landscape remains volatile, shaped by intensified trade tensions and new tariffs. On the domestic front, he said the outlook remains encouraging with Petronas reaffirmed its commitment to upstream development, with its 2025-2027 Activity Outlook targeting stable national oil and gas production of two million barrels of oil equivalent per day. "The Malaysia Bid Round 2025, launched earlier this year, is expected to draw new exploration investments and signal continued growth for offshore services," he added. Jamalludin said while the offshore support vessel market continues to face supply constraints due to limited new builds, largely attributed to ESG-linked financing challenge, this as an opportunity to reposition strategically. "We are staying the course with prudent financial and operational management while embracing opportunities to refresh our fleet and enhance efficiency," he said.
