Malaysia's state-owned Petronas reported lower oil and gas output, as well as a slump in profits for the first half of the year, an indication that the firm is facing increasing headwinds.
Petronas' total oil and gas output amounted to 2.403mn b/d of oil equivalent (boe/d) in January-June, down by 3.2pc from 2.482mn boe/d in the same period in 2024. The firm did not provide the breakdown of its oil and gas output, but the fall in overall production was mainly because of "lower gas output from domestic operations and lower liquid production from the international portfolio," Petronas said.
The company recorded a revenue of 132.6bn ringgit ($31.4bn) for the first half of this year, down by 24pc from 173.6bn ringgit in the same period last year. In line with this, the group's profit after tax slumped by 19pc to 26.2bn ringgit.
The fall in earnings was mainly because of the impact of discontinued operations from the divestment of its 74pc share in South African oil firm Engen in May 2024, an unfavourable currency exchange, and lower average realised prices from oil products, crude and condensate resulting from lower benchmark prices, Petronas said.
Petronas' capital expenditure fell by 31pc to 17.7bn ringgit for the first half of the year.
The firm is "undergoing a strategic transformation," it said. It also posted a significant drop in profit in 2024. Following this, Petronas in June announced it would reduce its workforce by 10pc, as it is navigating a "polycrisis driven by global pressures, coupled with heightened challenges to unlock the full potential of its oil and gas resources in Malaysia."
The firm expects oil prices to stay subdued because of persistent geopolitical tensions, macroeconomic uncertainties, changing regulatory landscapes and the accelerated unwinding of Opec+ output cuts.
Petronas is still focusing on strengthening its domestic oil portfolio and continues to engage in exploration efforts. It made two exploration discoveries in Malaysia at the Lebah Emas-1ST1 well in Block PM6/12 and Megah-1 well in deepwater block 3K. It also achieved first hydrocarbon output at six projects in Malaysia and three projects internationally.
Petronas' group-wide greenhouse gas emissions grew by 1.5pc in the first half of the year to 27.3mn t of CO2 equivalent (CO2e), mainly due to operational transitions, including the transfers of operatorship for two production sharing contracts, it said.
Its renewables subsidiary Gentari achieved a cumulative installed and under-construction capacity of 8.4GW in the first half of this year. It also signed a joint development agreement to export renewable electricity from Vietnam to Malaysia and Singapore, in a step towards establishing the regional Asean power grid.
