Malaysian state oil firm Petroliam Nasional Bhd (Petronas) notched up another record profit on Thursday and paid a whopping dividend to a government expected to call a geeneral election within months Malaysia's biggest company posted net earnings of $12.9 billion for the year ended March 31 from a revised $11.4 billion in 2005/06, after the price of its benchmark Tapis crude rose roughly 11 percent in the financial year.
But the clock is ticking on Malaysia's status as Asia's largest net oil exporter due to the country's growing demand for petroleum products, Chief Executive Hassan Marican said. "If demand continues to grow at 4 percent per annum, we will become a net importer by 2010," he said.
A three-year boom in crude oil prices has doubled Petronas profits, bolstering government coffers and the wider economy as the nation prepares for a possible early election, widely expected to be called before April 2008.
When asked for the company's outlook, Hassan told reporters: "I think there is a consensus in the industry that in the short term, the price will remain firm."
Petronas paid dividends of 16 billion ringgit ($4.6 billion) to the government in 2006/07. It is the single-biggest contributor to the state and said it contributed about a third of total government revenue, including taxes and royalties.
"Paying higher dividends to the government is not going to disrupt our expansion plans and growth," Hassan said. "The government has been very fair in allowing us to plough back our profits in order to grow our business." Prime Minister Abdullah Ahmad Badawi has stepped up spending on major projects with a $54 billion five-year development plan unveiled in March 2006. Petronas is expected to play a leading role in an east coast regional development to be announced soon.
Petronas has been one of the few shining successes among Malaysia's state-linked firms and is the most international. It operates in more than 33 countries and draws about 37 percent of its revenues from international operations.
In financial size, it ranks 30th in the world among oil firms, but it makes almost as much money as No 3 US oil company ConocoPhillips.
Petronas said revenue rose 14.9 percent to an all-time high of $51 billion in 2006/07. Operating cash flow was $15.9 billion, against $16.2 billion a year earlier. The firm's cash balance was $22.8 billion, compared to $18.6 billion the previous year.
The group's debt stood at $10.4 billion, down from $11.9 billion the previous year, with most of its debts maturing in five to 10 years, as it has been reducing its exposure to the bond market.
The company has expanded abroad as crude oil production slows at home. Petronas said it produced 581,700 barrels of oil equivalent (boe) a day outside Malaysia in 2007, or 34 percent of total output.
Daily production of crude and condensates in the country for the year to end-March stood at 506,500 barrels, down 4.4 percent from a year earlier, while daily natural gas output was down two percent at 621,700 boe, from 634,200 boe in 2006. The domestic fall was due to increased maintenance work at ageing facilities, depletion of existing fields and project delays caused by scarce drilling rigs and gear, Hassan said.
"Fifty-six percent of our offshore facilities are more than 20 years old, and that 56 percent includes 150 platforms," he added.
Petronas's total reserves stood at 26.5 billion boe, with international reserves accounting for 24 percent. Malaysia's total reserves of oil and condensates rose 2.1 percent to stand at 5.36 billion barrels by January 1, 2007.