Petroliam Nasional Bhd (PETRONAS), Malaysias state-owned oil and gas company, said last week its pre-tax profit fell 53 per cent to RM36.68 (US$8.88) billion for the financial year ended December 31, 2015 from RM77.69 billion in the 2014 financial year. Cumulatively, for FY15, the group reported a 56% decline in profit after tax to RM20.8 billion from RM47.6 billion in FY14.
For the fourth quarter ended December 31, 2015, PETRONAS posted a pre-tax profit of RM1.22 billion compared with a pre-tax loss of RM358 million in the same period in 2014, while revenue fell to RM60.1 billion from RM79.37 billion in FY 2014. For the fourth quarter, PETRONAS posted a net loss of RM3 billion due to RM12.9 billion assets impairment.
President and Group Chief Executive Officer Datuk Wan Zulkiflee Wan Ariffin attributed the lower results to the depressed oil price environment and net impairment on assets, however, he said the company remained profitable, driven by its downstream business.
"Our downstream business had a better year, benefiting from lower feedstock prices and higher profit margin, in fact, the segment recorded a financial performance with a profit after tax jumping 50 per cent to RM8.9 billion," he told a press conference after announcing PETRONAS' 2015 financial year performance.
Wan Zulkiflee attributed the key drivers of the segment to the realisation of post-acquisition synergies at PETRONAS' Melaka Refinery, PETRONAS Gas' transformation initiative, cross-business plant performance improvement initiatives and cost savings across PETRONAS' global lubricants business.
He said there was major progress in downstream segment key projects such as the PETRONAS Lubricants International's first lubricants blending plant in India.
For the upstream segment, there was a 3.0 per cent increase in production compared with 2014, driven by enhanced production and new production streams from Malaysia and Indonesia, as well as, additional production from Azerbaijan. "However, the sharp and prolonged decline in oil prices resulted in a 64 per cent drop in the upstream segment's profit after tax to RM19.6 billion while non-cash impairments of RM18 billion brought this down further to RM1.6 billion for the year," he said.
On outlook, Wan Zulkiflee said the next two years would continue to be challenging for the national oil and gas company as he expected the price of Brent crude to hover around US$30 per barrel this year after it averaged at US$52 per barrel in 2015. "We will take cost-optimisation measures to another level to counter adverse impact to our business, which will include additional reduction in capital and operational expenditures of RM50 billion over the next four years, starting with RM15-RM20 billion in 2016.
He added PETRONAS had also completed a review of its business operating model to facilitate higher efficiency levels and robustness in the organisation, resulting in a new organisation structure.
The leadership lineup, together with the new high level group organisational structure, was unveiled by Wan Zulkiflee at a recent gathering for PETRONAS employees. The structure sees new appointments from within the organisation, effective April 1, 2016, and the departure of some whose service contracts have expired.
The new leadership team is comprised of the following:
President & Group Chief Executive Officer
Datuk Wan Zulkiflee Wan Ariffin
Executive Vice President & Chief Executive Officer, Upstream
Datuk Mohd Anuar Taib
Executive Vice President & Chief Executive Officer, Downstream
Md Arif Mahmood
Executive Vice President & Group Chief Financial Officer
Datuk Manharlal Ratilal
Senior Vice President, Project Delivery & Technology
Mazuin Ismail
Senior Vice President, Corporate Strategy
Adif Zulkifli
Senior Vice President & Group General Counsel
Mohamad Rauff Nabi Bax
Senior Vice President, Group Human Resource Management
Dato Raiha Azni Abdul Rahman
Vice President, Group Health, Safety, Security & Environment
Sharbini Suhaili
Senior General Manager, Group Strategic Communications
Zahariah A. Rahman
Senior General Manager, Group Internal Audit
Syed Sheikh Syed Idrus Alhabshi
