Petronas to keep oil, gas focus for next decade
Oil and gas remains the main focus for Malaysia’s state-owned oil firm Petronas for the next decade, even as it explores the alternative energy sphere.
Gentari, the firm’s latest clean energy subsidiary, was set up as a separate entity to keep the core business “lean, mean and generating as much (profit) as possible,” said Petronas’ vice president of exploration and upstream, Mohd Redhani bin Abdul Rahman.
“Renewable and sustainable energy is not our forte. It’s not something we’ve been doing for the last forty years,” Redhani said, adding that the guiding principles and business models for renewable energy are not compatible with how Petronas runs its oil and gas business.
“If you try to make an alternative energy project compete against an oil and gas project, it will not see the light of day,” said Redhani.
“We do this because we want to ensure as a business entity, we have longevity as we go towards a carbon-neutral world.”
Petronas’ core oil and gas business operations will continue to ramp up in the next 5-10 years, notwithstanding the recent volatility in oil prices, he said.
Gentari was introduced in June this year as part of the firm’s plans to look into hydrogen, solar energy and green mobility solutions as sources of low-carbon energy. The firm aims to achieve net-zero emissions by 2050. In its 10-year blueprint for the oil and gas sector unveiled in 2021, Petronas aimed to set aside 3.6bn-4bn ringgit/yr ($795mn-883mn/yr), or 9pc of its 40bn-45bn ringgit/yr capital expenditure (capex), over the following five years for renewable energy.
Petronas will “do as much as possible” to maintain production at around 2mn b/d of oil equivalent in the next 10 years, said Redhani, adding that between 20 and 25 exploration wells and about 140 brownfield projects are in the pipeline in the next 2-5 years.
Petronas’ profits surged in the first half of this year on the back of increasing oil and gas prices resulting from a widening global supply gap. Its capex over January-June amounted to 18.9bn ringgit, mainly because of upstream projects.
Published: 14-09-2022
