PETRONAS EYES AMERICAS TO BOOST OIL RESERVES
National oil firm to allocate larger share of future capex towards projects stretching from Canada to Brazil
MALAYSIA’S stateowned oil company is banking on the Americas to help raise reserves and maintain production rates as wells in its Southeast Asian home market continue their natural declines.
Petroliam Nasional Bhd (Petronas) would allocate a larger share of its future capital expenditure towards projects stretching from Canada to Brazil as oil prices recovered from the 2014 crash and as the company completed a US$27 billion (RM111.5 billion) refinery and petrochemicals project at home, said chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin.
The producer last week agreed to buy stakes in two offshore fields in Brazil, further expanding its Americas portfolio.
“There are a lot of new opportunities for us in that part of the world,” said Wan Zulkiflee in an interview, here, recently, adding that the shifting focus didn’t mean the company was leaving its home country.
Petronas still “has many more projects lined up” in Malaysia, including plans to boost spending on renewable energy”, he said.
Petronas typically allocated RM45 billion to RM55 billion on capital expenditure (capex) every year and upstream projects would have “a bigger chunk” of that, said Wan Zulkiflee.
One of those to get a slice of the spending boost will be a liquefied natural gas (LNG) export venture in western Canada with Royal
Dutch Shell Plc.
Petronas last year agreed to buy a 25 per cent stake in the C$40 billion (RM120 billion) LNG Canada project.
Construction costs would increase over the next few years and Petronas would need to boost spending on gas drilling, said Wan Zulkiflee.
The company plans to invest US$2.3 billion over four years in Argentina’s Vaca Muerta shale oil fields with state-controlled YPF SA, and has interests in 10 offshore blocks in Mexico. Drilling in Mexico will begin in the third quarter.
The purchase of stakes in Brazilian oil fields from Petroleo Brasileiro SA for US$1.29 billion would bring commitments for more spending as the companies drilled to boost production, said Wan Zulkiflee.
The company also had no plans to tap the bond market and was cash-rich, he said.
Petronas had RM172.5 billion of cash and cash equivalents as at December 31, according to its latest financial statement.
Petronas is also looking to build up its renewable business. The company made its first foray into cleaner energy last month after agreeing to buy Amplus Energy Solutions Pte Ltd from I Squared Capital in Singapore, amassing 500 megawatts of solar power in operation or under development.
Petronas planned to set aside five per cent of its annual capex towards this segment and would be looking at further opportunities in Malaysia, focusing on solar and wind, said Wan Zulkiflee.