KUALA LUMPUR (Oct 15): The collapse in oil prices to about US$40 (RM165.92) a barrel this year has prompted Petroliam Nasional Bhd (Petronas) to consider exiting the Gharraf oilfield in southern Iraq, Argus Media reported, quoting Petronas president and group chief executive officer (CEO) Tengku Muhammad Taufik Tengku Aziz as saying at the Energy Intelligence Forum.
Argus Media reported yesterday that Petronas operates the Gharraf oilfield with a 45% stake, followed by Japan Petroleum Exploration Co Ltd with a 30% interest, while Iraqi state-owned North Oil Co holds the remaning 25% stake in the joint venture (JV).
It was reported that output from the field was suspended in mid-March in response to the Covid-19 pandemic. Production restarted in July at a rate of 50,000 barrels/day. The Gharraf oilfield produced 90,000-100,000 barrels/day last year, according to the report.
"Under the US$40/barrel scenario, I'd be the first to admit that under all possible lenses, we've had to trigger a review of our intent to stay in Gharraf.
"I can only say watch this space ... we are in consultation with the host authorities to see whether the [oilfield's] economics can be improved but of course, over and above that, we need to make sure it makes sense from the sustainability lens as well.
"If we can make it (the oilfield) better, cleaner, we'll still pursue it," Tengku Muhammad Taufik said.
It was reported that Tengku Muhammad Taufik said Petronas' role as the custodian of Malaysia's oil and gas (O&G) resources requires it to look at its portfolio through "strict and regimented” lens.
He reportedly said this means projects not only need to be resilient over the long term in a US$40/barrel crude oil price scenario but also "cleaner and greener" to align with expectations of stakeholders and customers.
Global crude oil prices rose today. Reuters reported that oil prices rose slightly in early trade after data showed US crude stockpiles fell last week, adding to 2% gains overnight, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies were seen fully complying in September with their pact to curb output.
It was reported that US West Texas Intermediate (WTI) crude futures had picked up four cents, or 0.1%, to US$41.08 a barrel as at 0032 GMT, while Brent crude futures rose five cents, or 0.1%, to US$43.37 a barrel.