KUALA LUMPUR (June 9): Petroliam Nasional Bhd (Petronas) chief financial officer (CFO) Liza Mustapha said on Thursday (June 9) that the Malaysian national oil company needs to have a target where a significant portion of the group's revenue over the next five to six years comes from something that is not directly related to oil and gas (O&G) to safeguard Petronas from volatile crude oil prices which have risen past US$100 a barrel partly due to Russia-Ukraine war-driven supply concerns.
"Oil prices have gone up so much. About US$16 a barrel in the first quarter of last year, and now it was more than US$100 a barrel in the first quarter of this year. At Petronas, we have to stick to things we can control, because the price of oil is something we cannot control.
"We are also thinking about how we can make our portfolio more resilient and not so vulnerable to oil price changes, because oil prices can go up and down," Liza said on Thursday at the MIDF Conversations event, which was held virtually.
MIDF group managing director Datuk Charon Mokhzani was the moderator for the event.
Liza said that since the onset of the Covid-19 pandemic in early 2020, the world has started to change, hence, Petronas needs to make sure that the company is successful in its existing businesses before funding its new clean energy or non-hydrocarbon-related ventures.
"That way we can achieve our goal of having a more robust portfolio," she said.
Petronas is allocating about RM60 billion for capital expenditure in financial year ending Dec 31, 2022 (FY22) compared with RM30.5 billion a year earlier as the company prepares for the resumption of business activities, which were earlier disrupted by Covid-19-driven movement restrictions, and as the group sets aside money for clean energy ventures.
Liza said non-hydrocarbon-related income is expected to account for about 30% of Petronas' revenue.
Globally, crude oil prices have taken cue from Russia-Ukraine war-driven supply concerns besides better demand outlook in the US and China.
It was reported that oil prices held near 13-week highs on Thursday, underpinned by robust demand from the world's top consumer US while demand is expected to rebound in China as Covid-19 curbs across major cities are relaxed.
"Brent crude futures for August  nudged up 12 cents to US$123.70 a barrel by 0033 GMT, while US West Texas Intermediate crude for July  was at US$122.17 a barrel, up six cents.
"Both benchmarks closed on Wednesday at their highest since March 8, matching levels seen in 2008," Reuters reported.