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Business Times
5 days ago
- Business
- Business Times
Petronas looks abroad to help cut production costs
[KUALA LUMPUR] Malaysia's state-owned oil and gas company Petronas is looking to expand output from more affordable assets abroad in an effort to cut production costs and rein in declining profits. Petronas is seeking to produce oil at a break-even level of US$50 per barrel, from US$60 to US$70 in the past five years, said Mohd Jukris Abdul Wahab, the chief executive officer of Petronas' upstream business, which includes exploring, developing and extracting oil and gas. The firm will focus more on countries where it already has a presence, including Canada, Suriname, Brazil, Turkmenistan and several South-east Asian nations. Still, Petronas does not rule out going into a new country if it provided 'headroom for us to grow', he added. 'We want to reshape the entire portfolio,' Jukris said in an interview on Jun 13 on the 79th floor of the steel-clad Petronas Twin Towers in Kuala Lumpur. 'We are preparing ourselves, moving into a more volatile environment in the future.' Petronas is shifting its strategy as a drop in crude prices from a recent peak in 2022 slashed profits and forced the company to lower dividends. The state-owned company said earlier this month that it will cut about 10 per cent of its workforce to reduce costs. While crude prices recovered some of the lost ground on Friday (Jun 13) after Israel's air strikes on Iran fuelled concerns of a wider conflict in the Middle East, the supply-demand outlook for oil points to more pressure in the longer term. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'Any capital deployment for our international asset has got to provide a healthy return,' Jukris noted. 'We are dealing with a lot more risk in some of the geographies that we are present.' Petronas' woes pose a challenge for Malaysia's government, which relies on the company for billions of US dollars in income. The national oil company has pledged RM32 billion (S$9.7 billion) in dividends this year, down from RM50 billion in 2022. The firm said in September that over the 50 years since its inception in 1974, it had injected RM1.4 trillion into the nation's economy through dividends, taxes and cash payments. The company plans to increase the net present value of its international upstream contributions to about 60 per cent within the next five to 10 years, from about 40 to 50 per cent now, said Jukris, who started his career at the firm in 1990. Petronas produces the equivalent of about two million barrels of oil per day in Malaysia and around 700,000 barrels abroad, Jukris said. To maintain this level of production in the face of declining output from older assets the company needs to bring in new fields, he added. Even as Petronas looks for new assets abroad, Jukris is optimistic that Malaysia's reserves will last for 'years to come', because investors keep making new discoveries. He said that there is still untapped potential in the country, including off the coast of Peninsular Malaysia where international oil companies have shown interest to explore. 'For the last 10, 15 years, we have been saying that our reserves will last only 15 years,' Jukris said. 'So today, we will also last another 15, 20 years.' BLOOMBERG
Business Times
6 days ago
- Business
- Business Times
Malaysia's oil giant Petronas looks abroad to help cut production costs
[KUALA LUMPUR] Petroliam Nasional (Petronas), Malaysia's state-owned oil and gas company, is looking to expand output from more affordable assets abroad in an effort to cut production costs and rein in declining profits. Petronas, as the company is known, is seeking to produce oil at a break-even level of US$50 per barrel, from US$60 to US$70 in the past five years, said Mohd Jukris Abdul Wahab, the chief executive officer of Petronas' upstream business, which includes exploring, developing and extracting oil and gas. The firm will focus more on countries where it already has a presence, including Canada, Suriname, Brazil, Turkmenistan and several South-east Asian nations. Still, Petronas does not rule out going into a new country if it provided 'headroom for us to grow,' he said. 'We want to reshape the entire portfolio,' Jukris said in an interview on Jun 13 on the 79th floor of the steel-clad Petronas Twin Towers in Kuala Lumpur. 'We are preparing ourselves, moving into a more volatile environment in the future.' Petronas is shifting its strategy as a drop in crude prices from a recent peak in 2022 slashed profits and forced the company to lower dividends. The state-owned company said earlier this month that it will cut about 10 per cent of its workforce to reduce costs. While crude prices recovered some of the lost ground on Friday (Jun 13) after Israel's air strikes on Iran fuelled concerns of a wider conflict in the Middle East, the supply-demand outlook for oil points to more pressure in the longer term. 'Any capital deployment for our international asset has got to provide a healthy return,' Jukris said. 'We are dealing with a lot more risk in some of the geographies that we are present.' A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Petronas' woes pose a challenge for Malaysia's government, which relies on the company for billions of US dollars in income. The national oil company has pledged RM32 billion (S$9.7 billion) in dividends this year, down from RM50 billion in 2022. The firm said in September that over the 50 years since its inception in 1974, it had injected RM1.4 trillion into the nation's economy through dividends, taxes and cash payments. The company plans to increase the net present value of its international upstream contributions to about 60 per cent within the next five to 10 years, from about 40 to 50 per cent now, said Jukris, who started his career at the firm in 1990. Petronas produces the equivalent of about two million barrels of oil per day in Malaysia and around 700,000 barrels abroad, Jukris said. To maintain this level of production in the face of declining output from older assets the company needs to bring in new fields, he said. Even as Petronas looks for new assets abroad, Jukris is optimistic that Malaysia's reserves will last for 'years to come', because investors keep making new discoveries. He said there is still untapped potential in the country, including off the coast of Peninsular Malaysia where international oil companies have shown interest to explore. 'For the last 10, 15 years, we have been saying that our reserves will last only 15 years,' Jukris said. 'So today, we will also last another 15, 20 years.' BLOOMBERG
New Straits Times
6 days ago
- New Straits Times
Customs seize RM1.4mil ganja at Rantau Panjang duty-free zone
RANTAU PANJANG: The Customs Department seized more than 14.398kg of ganja worth over RM1.4 million at the Rantau Panjang Duty-Free Zone on May 27. Kelantan Customs Department director Wan Jamal Abdul Salam Wan Long said acting on a public tip-off, the enforcement team found a suitcase left unattended in the area at 9.15pm "Checks showed there were 10 transparent plastic packets suspected to contain ganja flowers found inside the suitcase," he said in a statement today. "At the same time, a Thai national carrying another bag at the same location was also inspected. "We found 15 more transparent plastic packets, also suspected to contain ganja flowers." Initial investigations showed the suspect had used a smuggling route along Sungai Golok, entering the country through an illegal base and exiting via the duty-free zone. "The case is being investigated under Section 39B of the Dangerous Drugs Act 1952 for drug trafficking," he said. Wan Jamal added that such smuggling activities not only result in revenue losses for the country but also pose a threat to national security and public wellbeing.
Barnama
11-06-2025
- Business
- Barnama
IRRI Calls For Collective Action As Rice Faces Mounting Global Pressures
Farmers continue to face multiple challenges to produce the much sought-after rice in the world. Photo credit: IRRI, Philippines. By Vijian Paramasivam PHNOM PENH, June 11 (Bernama) -- The International Rice Research Institute (IRRI) is urging rice-producing nations to take bold, collective action to address the growing environmental and sustainability challenges in rice cultivation, a staple crop that remains essential to millions worldwide. Unveiling its 2025-2030 strategy on Monday, the Philippines-based institute said despite advancements, rice cultivation still accounts for 1.5 per cent of global greenhouse gas emissions and consumes 30 per cent of the world's freshwater resources. bootstrap slideshow 'Rice feeds more than half the world's population, but its potential as a climate and development solution remains underleveraged. Our future depends on how we grow, consume and govern rice. 'This strategy is our call to partners everywhere—let's act together, with urgency and ambition, to ensure rice remains a force for good in a changing world,' said IRRI Director General Dr Yvonne Pinto. The new vision comes at a time when farmers worldwide are facing a host of challenges, including the impacts of climate change, the loss of fertile land to rapid urbanisation, concerns over food safety, and increasing water scarcity. According to IRRI, rice feeds over four billion people and supports 150 million farmers across 100 countries. The RM1.4 trillion (US$332 billion) rice industry is the world's third most traded commodity and a growing global market. IRRI's strategy seeks to tackle pressing global issues ranging from food price volatility and climate-related pressures to health disparities and social inequalities within rice-growing communities. Jagdish Kumar Ladha, Adjunct Professor at the Department of Plant Sciences, University of California, told Bernama that IRRI's strategy comes at a critical stage for rice-producing nations across Asia.
New Straits Times
08-06-2025
- Business
- New Straits Times
Leon Fuat braces for regional steel glut, sharpens edge on pricing and speed
KUALA LUMPUR: Steel processor Leon Fuat Bhd is stepping up cost efficiency and delivery speed as it braces for rising competition in Southeast Asia, with trade diversion risks looming from expanded United States steel tariffs. Executive director Ooi Shang How said the group is actively tracking changes in global trade flows amid concerns that steel products originally bound for the US could flood regional markets instead, pushing prices down and squeezing margins. "Although we do not export directly to the US, the indirect impact from trade diversion is real. An oversupply in Southeast Asia could drive up competition and weigh on prices," he told Business Times. To stay ahead, the company is banking on cost-competitive pricing, swift turnaround, and a widening product range, including larger steel pipes under its ongoing expansion. "We continue to optimise our processes, invest in faster and more efficient cutting technologies, and uphold high quality to offer clients a one-stop, timely solution," said Ooi. He said Leon Fuat's diverse customer base across sectors also cushions it from volatility, allowing strong segments to offset weaker ones. "The steel industry is inherently volatile, so adaptability, efficient inventory management, and transparency, including write-downs when prices fall, are essential to sustaining profitability," he said. Leon Fuat processes and trades various flat and long steel products and manufactures welded pipes, perforated sheets, and expanded metal. Its latest automation upgrades include a fibre laser cutter that performs five times faster than conventional machines. Even in a crowded steel pipe manufacturing market, Ooi believes the group's mix of quality, speed and cost-effectiveness offers a distinct edge. "We recognise how critical project schedules are to clients. Our ability to meet timelines consistently sets us apart," he said. As Leon Fuat prepares for increased competitive pressure in the region, its focus remains on agile operations and expanding its product capabilities to strengthen market share. For the first quarter ended March 31, 2025, Leon Fuat's net profit slumped 83 per cent year-on-year to RM1.4 million from RM8.22 million, weighed down by weaker average selling prices and narrower margins across its steel portfolio. Revenue declined to RM212.52 million from RM225.26 million, dragged by a 15.9 per cent fall in contributions from its steel trading segment to RM64.11 million. The drop was attributed to both lower tonnage and softer selling prices for flat and long carbon steel products. As at end-March, the group held RM25.62 million in cash and bank balances against total borrowings of RM464.68 million. Net assets per share inched up to RM1.74 from RM1.73 as at Dec 31, 2024. On Friday, shares of Leon Fuat closed unchanged at 37 sen, with 22,700 units traded. This gave the company a market capitalisation of RM126.17 million. Year-to-date, the stock has fallen 21.28 per cent from 47 sen on Jan 2.
