Petronas to adopt 3-pronged growth strategy
National oil firm looking at ways to extend value chain of its business
PETROLIAM Nasional Bhd (Petronas) will focus on growth through a threepronged strategy this year, said its president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin.
“Firstly, we are still looking at our cash flow. Secondly, we want to expand our core business. We are a fully-integrated company and I believe in its business model. We are looking at ways to extend the value chain of our business.
“Thirdly, we are looking into things that are new to Petronas. For example, we are looking at the potential of being involved in renewables such as solar and other new energies,” he said during an interview with Bloomberg TV at the World Economic Forum here.
According to a statement, Wan Zulkiflee said there are three major challenges that could impact the national oil firm.
The first is talent to drive the company. Petronas is investing in talent, especially in new areas of business that the company is considering.
The second challenge would be in oil prices. Wan Zulkiflee said Petronas is familiar with the cycles in oil prices and confident that the company is now in a stronger position to withstand the cycles. The third challenge is in the development of renewables against fossil fuels.
The outlook for oil prices, meanwhile, should be considered in the context of supply, demand, and speculation, he said.
“What we see today is a congruence of many events, essentially the Organisation of the Petroleum Exporting Countries (Opec) and non-Opec voluntary production cuts that are helping to boost the oil price. We also see some supply disruption in Libya. The demand side is looking good globally and we expect this to continue in the next few years,” said Wan Zulkiflee.
He said the increase in United States shale production would have an impact on prices.
On the speculative side, Wan Zulkiflee said Petronas will closely monitor events happening in the Middle East, North Korea and other parts of the world that could impact crude oil prices.
“In Petronas, we continue to take a conservative view and our budgets are lower than what oil prices are today,” he said.
He said for the past few years, Petronas has undertaken many strategic initiatives to respond to the drop in oil prices.
“We did a lot of housekeeping which included looking at our cash flow, how we deliver our projects, simplification of processes, revised talent development, technology and very importantly, the culture of the organisation,” he said.