Malaysia’s Petronas posts 9% jump in Q1 2019 profit

FILE PHOTO: A Petronas logo at their office in Kuala Lumpur, Malaysia August 15, 2017. REUTERS/Lai Seng Sin

Malaysia’s state energy firm Petronas said on Friday work at its $27 billion refinery and petrochemical project in the southern state of Johor had slowed due to an explosion last month, but stuck to its timeline of resuming operations by the year-end.

The company also posted on Friday a 9% jump in quarterly profit and warned of a challenging year ahead given volatility in oil prices.

Petronas is in the final stages of finishing the Refinery and Petrochemical Integrated Development (RAPID), a 50-50 partnership with Saudi Arabia’s state-owned Saudi Aramco.

An explosion and fire occurred at the plant’s atmospheric residue desulphurisation unit in April. The fire was contained within 30 minutes.

“Work will be continued towards achieving planned commercial operation date in the fourth quarter, although not at full capacity,” the company said in a statement.

Investigations on the incident are still ongoing, Petronas said.

First-quarter profit at Petronas, the sole manager of Malaysia’s oil and gas reserves and a key contributor to state coffers, rose to 14.2 billion ringgit ($3.39 billion) from 13 billion ringgit.

Company’s revenue rose 7% to 62 billion ringgit.

Total production volume for the quarter dropped 1.3% to 2.4 million barrels of oil equivalent (boe) per day due to lower crude production from Iraq. Sales of liquefied natural gas rose 6.7% to 8.45 million tonnes.

“The board expects the overall year-end performance of Petronas to be affected by the rising volatility of oil price and foreign exchange movement,” the company said.

The oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks, it said.

Last month, Petronas acquired a Singapore-based solar energy company as part of a strategy to move into renewable energy and chase high-growth business to complement its mainstay operations.