Malaysia’s slashed oil dividend is still too high

Dateline 2015-11-12, Reuters:

Austerity measures at Malaysia’s oil giant will need to go further. Low oil prices have forced Petronas to cut the dividend it will pay next year to the government by almost 40 percent. That’s painful for a country that depends on the state-owned group for around one third of federal revenue. But unless it takes wider action, Petronas will still need to dip into its cash reserves to fund the commitment.

Petronas has decided to lower its payout to 16 billion ringgit ($3.7 billion) in 2016 after Brent crude averaged just $50 per barrel during the quarter that ended in September. To put that in perspective, the group’s total contribution to state coffers -including corporate taxes and other royalties – added up to around 68 billion ringgit in 2014.

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