Petronas to step up security after Saudi attacks, warns on oil price volatility
Malaysia’s state-owned energy giant Petronas said it would beef up security at its plants after an attack on a Saudi hub last weekend, and warned oil price volatility in the rest of the year could affect its year-end performance. Heightened vigilance over security comes as the firm, known in full as Petroleum Nasional Bhd, nears the start of commercial operations at a $27 billion refinery and the petrochemical project built jointly with Saudi Arabia. Oil prices jumped by as much as a fifth after an attack on a key Saudi Arabian supply hub last weekend. Petronas said the market was expected to remain volatile in the second half due to the protracted U.S.-China trade war, sluggish demand and a slowing global economy. “These prevailing uncertainties are expected to pose challenges to the overall year-end performance of the Petronas Group,” it said in a statement. Petronas’s president and chief executive Wan Zulkiflee Wan Ariffin told reporters that last weekend’s drone and missile attack in Saudi Arabia was “an escalating risk”. “I think we are familiarising ourselves with the technology,” he said, according to state news agency Bernama. Petronas said work at its Saudi-partnered refinery and petrochemical project, the Pengerang Integrated Complex in the southern state of Johor, was 99.7% completed as of June 30. It was hit by a fire in April. The firm reported on Friday an 8% rise in second-quarter profit after tax to 14.7 billion ringgit ($3.52 billion), up from 13.6 billion ringgit in the same period last year. The increase was boosted by foreign exchange fluctuations but was partially offset by higher product costs. Revenue fell marginally to 59.1 billion ringgit from 59.2 billion ringgit, mainly due to lower average sale prices for petroleum products and liquefied natural gas (LNG). For the first half of the year, Petronas’ total oil production volume rose 1.4% from the same period last year. Sales of LNG were up 5%, the firm said. Petronas also confirmed that Mohamad Anuar Taib, the CEO of its upstream business, will be leaving the firm this week, Bernama reported. The company had denied reports of his departure in June, but now says that Mohamad Anuar had asked to resign for personal reasons. “We have a strong succession plan in place, and (his departure) does not have any impact to our business plans going forward,” chairman Ahmad Nizam Salleh was quoted as saying.
Petronet to sign $2.5 billion LNG deal with US developer Tellurian: Sources
India’s Petronet LNG is set to sign a deal with US liquefied natural gas (LNG) developer Tellurian Inc worth more than $2 billion in the proposed Driftwood project in Louisiana, two sources told Reuters. This will be part of wider cooperation between both countries, with Indian Prime Minister Narendra Modi expected to meet US President Donald Trump in Houston this weekend to discuss ways to deepen their energy and trade relationship. India could increase its trade footprint at a time when the United States and China are in the midst of a tit-for-tat trade war, analysts have said. Petronet will sign a memorandum of understanding (MOU) with Tellurian on Saturday to invest $2.5 billion for rights of up to 5 million tonnes a year of LNG over the lifespan of the project, two sources familiar with the matter said. The MOU will be signed at an energy forum in the presence of Modi, one of the sources said, declining to be named as he was not authorised to speak with media. This would be a big part of Modi’s trade discussion with US President Donald Trump, he said. Indian gas importer Petronet and Tellurian had first signed a broader agreement in February which did not specify investment numbers or offtake volumes. India is expanding its pipeline network and building new LNG import terminals to encourage the use of cleaner fuel. Modi has set a target to raise the share of natural gas in India’s overall energy mix to 15% in the next few years from about 6.5%. Tellurian is offering an equity interest in Driftwood Holdings, which comprises Tellurian’s upstream company, its pipeline and the upcoming terminal that will be able to export 27.6 million tonnes of LNG a year. A $500 million investment in Driftwood would give the stakeholder rights over one million tonnes a year of LNG over the life of the project, according to a presentation by Tellurian posted on the US company’s website. Both companies could not immediately be reached for comment.