KUALA LUMPUR — June 24, 2019: The oil and gas sector will see in the next few years the impact from lower investments in the last few years especially in projects with a long gestation period as a result of lower crude oil prices.
However, national oil company Petronas sees that short-term demands can be filled with unconventional short cycle projects.
Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin today spoke on how it has secured a positive final investment decisions for the liquefied natural gas project in Canada.
“That is our biggest investment on the LNG front,” he said during the CEO strategic dialogue here. Petronas has a growuing portfolio of LNG supply sources in Malaysia, Egypt, Canada and Australia and this will be a big income contributor to the company.
In addition, the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang is expected to commence commercial operations in the fourth quarter of this year. Petronas has invested around US$26 billion in Rapid, the biggest project it has undertaken. The complex has a 300,000 barrels per day refinery capacity and 3.3 million tonnes of petrochemical production.
“We take a bullish view on demand for petrochemicals. We sanctioned this project when oil prices were really low. Now the construction is almost complete, we are pre-commissioning part of the plant and we hope to be in commercial operations by the end of the year,” said Wan Zulkiflee.
Wan Zulkiflee also spoke about how Petronas would continue to eliminate inefficiencies in its operations once oil prices have stabilised.
“We learn many things in these difficult times. Many inefficiencies have crept not only into Petronas (but also) the whole industry when the times were really good. We really took this opportunity to eliminate these inefficiencies.
“But apart from that, there are a few things that we said that we will not change. For instance, our staff competency building budget and exploration budget… we did not change that because all of these are long-term. Our research budget and our number of scholarships too we didn’t change during the difficult times. We give out more than 300 scholarship every year.”
To a question on the need to address the impact of the oil and gas industry on climate change, Wan Zulkiflee said Petronas’ leadership currently spends at least seven to 10 times more on sustainability compared to the last five years.
“In Malaysia, a lot of our fields are high CO2 fields. We invest in technology and a lot of initiatives on how to manage these high CO2 fields. Today, Malaysia produces 370 million tonnes of carbon dioxide equivalent.
“Last year, Petronas produced around 54 million tonnes of CO2 equivalent. Our target is to bring it down to 49.5 million tonnes in three to five years.
“We have a lot of high CO2 fields and even to keep at the current level is a challenge but we have set ourselves a target to reduce this.
“It is a very big challenge for the organisation but we are committed to doing that,” pledged Wan Zulkiflee. — Bernama