Petronas: Lower dividend payment to government this year

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas), which saw a 39% earnings drop for the first quarter ended March 31, 2015, plans lower dividend payment to the government this year.
Speaking to the reporters at a press conference here last Friday, president and group CEO Datuk Wan Zulkiflee Wan Ariffin said this year would only see RM26 billion dividend payout compared with RM29 billion last year.
"The dividend for this year has been decided upon, which is lower than what was paid last year," he said.
Owing to low oil price, Petronas' first-quarter net profit slumped 39% to RM11.4 billion against RM18.8 billion in the previous corresponding period, but mitigated by better oil and gas production volume, favourable US dollar against the ringgit as well as solid downstream refinery margins.
Revenue for the quarter under review meanwhile dipped 21% to RM66.2 billion versus RM84 billion a year ago.
Wan Zulkiflee expects oil prices to remain at the current level for coming quarters, with an average price of US$55 per barrel for 2015.
Despite that, he said Petronas' capital expenditure (capex) will still be higher at RM70 billion this year compared with RM60 billion in 2014.
"The 15% cut in capex is based on a budget that was approved last year, so capex for 2015 is (still) higher than 2014," he noted, adding that Malaysian operations would account for 54%.
The operating expenditure (opex) cut for 2015 is 24%.
Wan Zulkiflee also said that Petronas has saved some RM200 million in operating costs following the renegotiation of existing contracts over the past few months.
"But going forward, when the activities are higher, we should be able to see more savings," he added.
"We always focus on things that we can control, for instance our plants and production facilities, and essentially prices we can't control, the outlook would be much dependent on what are the realised price for crude and products," he said when asked of the company's outlook.
On a separate note, Wan Zulkiflee said Petronas expects to make a conditional final investment decision (FID) for the RM36 billion Pacific Northwest liquefied natural gas project by next month.
"At the moment, there are still a few items with regards to environmental approval that are still pending, that would be a major condition.
"And the other one is a project development agreement that was signed two days ago with the (British Columbia) government would also require legislation for this agreement to be rectified," he explained.
Worth noting is that recently the LNG project suffered a setback when an aboriginal group Lax Kw'alaams First Nation rejected a $1.15-billion benefits package in three community votes.
On this, Wan Zulkiflee said: "We're involved in constructive engagements with the First Nations and other communities, there are only two major conditions for FID, the governments of both federal and British Columbia are very supportive and assisting us in exploring how to take the project forward."
Petronas executive vice president and upstream CEO Datuk Wee Yiaw Hin added that Petronas has completed deals with three Nations band, with another two in discussions.
Meanwhile, in a press statement released last Friday, the national oil company stressed that it has never been requested to look into the Tun Razak Exchange (TRX) development.
"In fact, we have sufficient on-going developments at KLCC comprising office buildings, a hotel and extension of retail space being undertaken by KLCC Holdings (our property arm) and its partners," it noted.