Malaysia's Petronas posts lower net profit

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KUALA LUMPUR, Malaysia -Malaysia's national oil company Petronas reported a double-digit decline in net profit Thursday, blaming lower demand for oil and higher production costs amid a global downturn.

Net profit fell 14 percent to 52.5 billion ringgit ($14.8 billion) in the financial year ended March 31, it said in a statement. This was despite an 18 percent rise in revenue to a record 264.2 billion ringgit ($74.5 billion).

Chief Executive and President Hassan Marican said the profit decline reflected the "adverse low price, high cost industry environment" in the second half of the year.

Oil prices were volatile, with Malaysian crude oil sold at an average $125.45 in the first half of the year before plunging to $50.69 in the second half, he said. But production and operating costs continued to remain high, he said.

Despite the lower profits, Hassan said Petronas — Malaysia's only Fortune 500 company and the country's most profitable — remained competitive and its performance was in line with other oil majors.

He said the company's payments of taxes, royalties, export duties and dividends to the government rose by 20 percent to 74 billion ringgit ($21 billion), nearly 45 percent of federal government revenue last year.

Petronas spent 44 billion ringgit ($12.4 billion) in capital expenditure and investments during the fiscal year, up 17 percent from a year earlier, he said. It signed six new production sharing contracts abroad, bringing its total ventures to 66 projects in 22 countries.

International operations, mainly in Africa, contributed 42 percent of the company's revenue while exports made up 37 percent and domestic operations about 21 percent.

Hassan said Petronas faced challenges in maturing domestic acreage, declining production and increasingly difficult access to oil and gas reserves, but it will continue to invest and grow its international business.

2009-06-25 04:56:28