Petronas not dependent on anyone to fund projects

Feb 22, 2017
Petronas embarks on a project with the entire funding requirement factored in and would not be dependent on anyone to fund its projects.
Petronas embarks on a project with the entire funding requirement factored in and would not be dependent on anyone to fund its projects.

Petroliam Nasional Bhd (Petronas) talks with potential partners for its projects are driven by interest in bringing in new technologies and not with the intention of getting funding to help finance projects.

Its president and chief executive officer Wan Zulkiflee Wan Ariffin said that when Petronas embarked on a project, the entire funding requirement would be factored in and would not be dependent on anyone to fund its projects.

“We are always open to new potential partners to maximise the value of our projects and better manage the cash position. We only pursue partnerships on terms acceptable to us,” he told newsmen at a briefing in Kuala Lumpur on Tuesday February 22.

Wan Zulkiflee was commenting on recent news reports that the national oil company was looking for partnership to take over a large minority stake in a key Sarawak offshore gas field as it was in need to raise cash at a time of low oil and gas prices.

The reports also quoted that Saudi Aramco, an entity from Saudi Arabia had pulled out from Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor and it was under pressure to find a new partner to complete the project.

“How can there be a situation of a party pulling out of something when the party was not part of it in the first place?” questioned Wan Zulkiflee

Wan Zulkiflee said that Petronas was close to 60% complete of the project and costs incurred are within projected, and the refinery will be ready by 2019 followed by the petrochemical portion by 2020.

On the potential sale of equity in the Sarawakian oil field, Wan Zulkiflee said: “There is also exploration work there, so it is normal to find a production sharing partner to share the risks and rewards.”

Wan Zulkiflee said that Petronas’ finances were intact despite suffering from lower earnings due to the oil price collapse, adding that numerous cost-saving measures had helped.

Wan Zulkiflee said that the oil major was using a price assumption of US$45 per barrel for Brent crude oil for its 2017 planning and that it was maintaining its capital expenditure budget at RM60bil for the year.