Direct hit seen for oil and gas companies

April 24, 2020

“May force”? Please…

Dateline 2020-03-10, The Star:

The negative sentiment on oil prices, stemming from the Covid-19 outbreak and Opec+’s failure to cut oil production, is expected to cause a direct fundamental impact on domestic oil and gas companies, just as some of these companies are starting to see an improvement in their earnings.

UOB Kay Hian said that the combination of Covid-19 and Opec+’s failure may force Petronas to take action, potentially reducing activities if the national oil and gas company’s cash flow in the first half of the year is severely impacted.

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Crude oil’s crash jeopardises Asia’s cleaner fuel ambitions

April 23, 2020

Dateline 2020-03-10, FMT:

Shockwaves from the oil price crash have hammered Asia’s biofuels industry, upending optimism over its future.

Crude’s nosedive erases any chance of discretionary blending of palm oil with diesel and drastically inflates the cost of government mandates.

“These are unprecedented times,” said Alvin Tai, an analyst at Bloomberg Intelligence.

Biofuels, such as a blend of diesel with palm, need to be attractively priced compared with fossil fuels to encourage consumption, and that often requires subsidies.

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Removing fuel subsidy will save RM6 bil, govt told as global oil price plunges

April 22, 2020

In an alternate timeline.

Dateline 2020-03-09, FMT:

Parti Sosialis Malaysia (PSM) today called on Putrajaya to do away with the fuel subsidy, saying this would save the government nearly RM6 billion in the wake of reports that oil markets have suffered their worst drop since the Gulf War.

The party’s environmental and climate crisis bureau committee member, Sharan Raj, said Perikatan Nasional should abolish the automatic pricing mechanism (APM) and allow for free float.

He said the money saved from removing the APM could be used to subsidise and expand public transport nationwide.

…

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Petronas fails again to recuse judge in sales tax dispute

April 21, 2020

Dateline 2020-03-06, FMT:

Petronas has failed again in its move to disqualify Judicial Commissioner (JC) Christopher Chin from hearing Sarawak’s suit for unpaid state sales tax amounting to RM1.3 billion.

A three-member Court of Appeal bench chaired by Badariah Sahamid said the prime minister had no influence in the elevation of JCs to become High Court judges under the Judicial Appointments Commission (JAC) Act.

Notwithstanding the provisions in the Federal Constitution, Badariah said, the prime minister was required under the law to uphold the independence of the judiciary.

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SOGDC preps Sipitang industrial park as petrochemicals hub in Asia-Pacific

April 20, 2020

Dateline 2020-03-01, SCMP:

Strategically located within the Sabah, Brunei and Labuan economic triangle, the Sipitang Oil and Gas Industrial Park (SOGIP) offers the perfect site for a successful petrochemical business. Envisioned as a world-class integrated industrial park, SOGIP is primed to become the new hotbed of oil and gas investments in Asia-Pacific.
SOGIP will build a deepwater jetty and storage facility, a central utility plant, and an efficiently scheduled waste management system that applies Canadian know-how. Through its partnership with Sabah Net, SOGIP will also be the first smart industrial park in Sabah.

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Exclusive: Shell-Total deal delayed by Malaysia-Brunei spat

April 19, 2020

Dateline 2020-02-28, Energy Voice:

Malaysia has revoked a cross-border agreement with Brunei to jointly develop fields along the Malaysian-Brunei maritime boundary.

The move jeopardises Total’s proposed sale of its Block CA-1 to Shell, as well as various offshore production-sharing contracts, including the Shell-led Gumusut-Kakap project.

Industry sources in Malaysia confirmed that Petronas halted discussions early February regarding unitisation and joint collaboration on several upstream projects straddling the maritime boundary, or that are located in Blocks CA-1 and CA-2 in the demarcated Malaysia Brunei Commercial Arrangement Area (CAA).

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Hibiscus Petroleum reports increased production from North Sabah fields

April 18, 2020

Dateline 2020-02-27, Oilfield Technology:

Hibiscus Petroleum Berhad has reported that average gross oil production from its North Sabah asset, offshore Malaysia, improved by approximately 20% compared to the previous financial quarter.
The additional oil production was delivered through infill drilling projects carried out as part of an aggressive production enhancement programme executed in calendar year 2019 (CY2019). This programme involved drilling a total of nine wells in Malaysia and the UK.
With the current and future enhancement projects across both North Sabah and Anasuria assets, together with potential production from existing developments or new acquisitions, the company aims to achieve its 2021 Mission of 20 000 barrels bpd of oil production.

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Cover Story: A gas pipeline’s costly malfunction

April 17, 2020

Dateline 2020-02-27, The Edge:

SUPPLY disruptions” in the commodities sector, which included a decline in crude oil and natural gas production, were named by the central bank as one of the factors that caused Malaysia’s fourth quarter GDP reading to come in way below expectations. GDP for the quarter would have been 4.3% instead of 3.6% had it not been for the disruptions, Bank Negara Malaysia said.

Growth in the mining sector contracted 2.5% year on year in 4Q2019, slower than the 4.3% contraction registered in 3Q2019, as output gradually recovered after major maintenance work in the previous quarter. Growth in natural gas output contracted as production was affected by temporary facility closures, according to Bank Negara’s quarterly bulletin for 4Q2019.

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Petronas sees a bearish 2020

April 16, 2020

Dateline 2020-02-27, The Edge:

Petroliam Nasional Bhd (Petronas) has hinted at a bearish outlook for 2020. The short-term headwind from the Covid-19 outbreak added pressure to the current low energy prices and weak demand.

Petronas is experiencing weaker demand in the current quarter, due to the slowdown in China, the epicentre of the Covid-19 virus, said Petronas president and group chief executive officer (CEO) Tan Sri Wan Zulkiflee Wan Ariffin.

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Petronas earmarks higher domestic capex for this year

April 15, 2020

Ah, 20/20 hindsight:

Dateline 2020-02-26, Malay Mail:

Petroliam Nasional Bhd (Petronas) is maintaining its annual capital expenditure (capex) at RM50 billion for 2020, but domestic capex will increase by more than 10 per cent to between RM26 billion and RM28 billion.

President and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said the higher capex allocated for domestic operations would be spent predominantly on upstream activities.

“There are a few projects. Some are ongoing. A lot of projects that we have already started, we need to continue.

…

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