‘Petronas has adjusted to US$50 oil price’

KUALA LUMPUR: Maybank Investment Bank (Maybank IB) believes Petroliam Nasional Bhd (Petronas) has adjusted to the US$50 (RM206) operating level with higher capital expenditure (capex) next year to cater for a pick-up in the oil and gas (O&G) activities.

Petronas’ adjustment to US$50 a barrel was in line with its global peers, according to Maybank IB.

It has also raised its crude oil average selling price expectations from US$52.50 to US$54 this year and from US$55 to US$60 next year.

Maybank IB expects local O&G activities and capex to improve next year as Petronas is expected to announce several major services awards.

“A rising capex globally is another positive trend. Prudent cost management and capex spending remain Petronas’ core agenda over the next 12 months.”

Maybank IB said the Organisation of the Petroleum Exporting Countries’ meeting this month would be closely monitored as the outcome could shape the direction of crude oil price.

“The foregone conclusion is to extend the output cut to next year. Anything less will be negatively construed,” it said.

Maybank IB said Petronas thirdquarter results trend mirrored its global peers, which registered earnings strength, cost management and prudent spending.

Petronas’ core net profit of RM11 billion took its nine-month core earnings to RM27 billion.

Capex for the quarter increased to RM12 billion, driven by its Refinery and Petrochemical Integrated Development project.