Malaysian oil and gas company Petronas, while acknowledging a slight recovery in oil prices, expects uncertainty to persist for a while.
Presenting its half-year results on Monday, the company posted profit after tax of RM6.2 billion ($1.54 billion) for the half-year ended, a 72 per cent dip from RM22.5 billion ($5.6 billion) in the corresponding 2015 period.
Petronas said volatile oil prices coupled by oversupply and lagging growth demand continued to impact the group’s half year performance as compared to the same period last year.
First half revenue fell to RM10.0 billion ($2.5 billion), a 68 per cent drop from RM31.6 billion ($7.8 billion) achieved in the same period of 2015.
The Malaysian company said the steep decline in performance was the result of lower average realized prices across all products following the downward trend of key benchmark prices.
Total production volume for Malaysia and international for the first half of 2016 was 2.39 million barrels of oil equivalent (BOE) per day, a slight increase compared to 2.33 million BOE per day in the previous corresponding period.
The increase, Petronas said, was mainly due to higher gas production from fields in Peninsular Malaysia to support the shortfall in imported gas, additional production streams from Indonesia and Algeria, and improved facilities uptime and efficiency in Malaysia and Canada.
“Despite a modest recovery in crude oil prices, uncertainties remain due to persistent oversupply and sluggish demand outlook. PETRONAS continues to remain focused in driving efficiency efforts and fiscal discipline in this challenging industry environment. While performance for the rest of 2016 will continue to be impacted by volatility in oil prices, the financial position and liquidity of PETRONAS are expected to remain strong,” Petronas said.