KUALA LUMPUR (Feb 26): Petroliam Nasional Bhd (Petronas) is expecting to spend between RM40 billion and RM45 billion in annual capital expenditure (capex) over the next five years, based on its projection of oil prices and outlook on the industry.
Petronas plans to spend 55% of the annual capex allocation on domestic investments, with the remainder on international investments, according to president and CEO Tengku Muhammad Taufik Aziz.
Some 9% of its annual capex will be allocated to new energy initiatives, he said, which is almost double the previous 5% allocation set in 2020.
He stressed the importance for Petronas to make the transition into renewables, as legislations around the world as well as stakeholders demand a more sustainable method of energy production.
“I understand the intensity of queries around how we are measuring, recognising and doing something about our carbon footprint, which is increasingly on the minds of financiers.
“As we shift capital, they want to know that we have clear concrete steps to know that if they lend to us, or if institutions give us the proper credit ratings, it will not be ending up in a business that has stranded capital or something that is non-viable after legislations, technologies and consumer preference kick in,” he explained.
Taufik said Petronas has “very little choice” in the matter, and therefore it must make measured, deliberate and careful steps forward.
However, he said that oil and gas will still form about 50% of the world’s energy mix for the next 20 to 30 years, which gives the oil major time to transition.
He also gave the assurance that the group is committed to its goal of net-zero emissions by 2050.