Malaysian Petronas profits witnessed a strong jump in 2022, benefiting from the rise in energy prices in the wake of the Russian invasion of Ukraine.
Profits doubled 100% to RM101.6 billion ($22.59 billion), up from RM50.9 billion ($11.32 billion) in 2021.
Revenues also increased by 51% to reach 375.3 billion ringgit ($83.46 billion), according to Petronas’ 2022 business results, which were seen by the specialized energy platform.
However, the Malaysian state oil company expected oil and gas prices to decline in the current year (2023), due to the expected economic slowdown.
Petronas business results in 2022
Petronas’ cash flows from operating activities increased by 72% year-on-year, reaching RM135.3 billion ($30.09 billion), while capital investments amounted to RM50.1 billion ($11.14 billion), along with boosting the company’s total assets to RM710.6 billion. ($ 158.02 billion) on December 31, 2022, an increase of 12% year on year.
Shareholders’ equity rose to 401.6 billion ringgit ($89.3 billion) on December 31, 2022, mainly due to the profits recorded during the year, according to the statement of Petronas’ business results in 2022.
The company also recorded a total average daily production of 2,434 thousand barrels per day of oil equivalent in 2022, higher than 2,275 thousand barrels per day of oil equivalent in 2021.
This is mainly due to improved overall gas demand in Peninsular Malaysia, along with the discoveries made, and better performance in international operations.
Petronas said the group also achieved first hydrocarbon production at 37 sites, final investment decision for 26 projects, and 9 exploration discoveries in Malaysia and abroad.
Petronas profits in the fourth quarter of 2022
In a related context, Malaysian Petronas’ profits recorded a 55% jump in the fourth quarter of 2022, thanks to higher energy prices and an increase in sales volume.
The company’s profit was 24.4 billion ringgit ($5.44 billion) for the 3 months ending in December 2022, compared to a profit of 15.7 billion ringgit ($3.49 billion) in the same quarter of the previous year (2021).
Revenues jumped 38% during the fourth quarter of 2022, to 105.9 billion ringgit ($23.55 billion), according to Reuters.
Price correction in 2023
For his part, the CEO of Petronas, Tenko Muhammad Tawfiq, said that he expects prices to be corrected in the current year (2023), due to the expected slowdown in the global economy.
He explained that the year 2022 enabled the group to benefit positively from the increases in oil and gas, but the last year (2022) also indicated an increase in the volatility of supply and demand, driven by sudden shifts in the market and the rapid transition of energy.
“Since the recovery in demand is still fragile, due to supply challenges, this means volatility,” he said in a press conference.
He added, “Even as we progress relatively steadily, Petronas will continue to enhance its integrated value chain with greater emphasis on commercial and operational excellence.”
According to Petronas’ statement of business results in 2022, the group will continue to practice prudent financial management and strict discipline in reinvestment.
Domestic and international revenues
Petronas Group Chief Financial Officer Lisa Mustafa said that 74 percent of revenues were generated through export and international operations, although the bulk of the revenue generators were in Malaysia.
It added that domestic capital expenditures rose by 24 percent with the achievement of the final investment decision for 16 projects, while the group’s total loans amounted to 104 billion ringgit ($23.13 billion).
Lisa said that the oil and gas industry may witness a decline in prices during 2023; Given the expected economic slowdown, even as it grapples with the ongoing market volatility, reports Malay Mail.
“In this environment, the company will continue to drive operational excellence in its core business, while pursuing its goals of growth and sustainability,” she added.
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