- Unlocking value with a focus on decarbonisation
According to Upstream article published on December 1, 2022, Malaysia’s energy giant Petronas intends to invest more to accelerate growth, with a particular focus on future-proofing the company’s portfolio in an increasingly uncertain and volatile environment.
“We are taking deliberate steps to unlock new value from our core portfolio with a focus on the decarbonisation of our operations and will pursue attractive opportunities in cleaner energy solutions,” said Tengku Muhammad Taufik, Petronas chief executive.
Petronas in November announced its NZCE (net zero carbon emissions) 2050 pathway, detailing how the company will address emissions from its operations and unveiling growth targets for its cleaner energy solutions.
It has set a near-term target to cap operational emissions to 49.5 million tonnes of carbon dioxide equivalent by 2024 in Malaysia and achieve a 25% absolute emissions reduction groupwide by 2030 based on 2019 emissions data. Petronas from 2023 to 2026 will allocate 20% of its capital expenditure for decarbonisation projects and expansion into cleaner energy solutions.
Petronas believes oil and gas prices will remain volatile, “influenced by intensifying geopolitical and economic headwinds”. However, amid the global energy crisis exacerbated by reduced flows of Russian gas, the company said it will continue to invest responsibly towards ensuring energy supply security whilst pursuing its growth strategy and NZCE by 2050 target.
Petronas in the third quarter of 2022 recorded a 19% reduction in greenhouse gas emissions from its upstream operations compared to the same period last year, following the execution of multiple emissions reduction projects.
In September, Petronas officially launched Gentari, its clean energy solutions provider which today has 1.12 gigawatts of renewable energy capacity in operation and under development while the company is already performing studies into hydrogen projects in its native Malaysia and for hydrogen-to-ammonia projects in India.
Finances on the up
For the first nine months of 2022, Petronas posted revenues of 271.3 billion ringgit ($57.22 billion) compared to 171.4 billion ringgit in the corresponding period last year, mainly due to favourable prices for major products due with higher benchmark commodity prices.
The company’s after-tax profit for the nine months ended 30 September improved to 77.2 billion ringgit while earnings before interest, tax, depreciation and amortisation was 130.2 billion.
Petronas also boosted its cash flows from operating assets to 83.1 billion ringgit in the first nine months of this year. Against this backdrop, the Malaysian player’s capital investments totalled 27.4 billion – up 34% year-on-year – with upstream projects accounting for a major part of this spending.
"Petronas' delivery of a robust financial performance in the nine months of 2022 is the result of the dedication and service of our employees and partners as we contended with an ongoing volatile period in the energy market,” commented Tengku Muhammad Taufik.
“Petronas remains fully determined to strengthen its resilience and seize new opportunities, by staying true to prudent financial management and firm capital discipline in investing responsibly to sustainably deliver profitable growth.”
