Petronas, Malaysia's state oil and gas giant, on Thursday reported a decline in its first-half profit amid continued market volatility, lower natural gas prices, and higher taxes paid.
Petronas's profit after tax fell by 19% to $7.48 billion (32.4 billion Malaysian ringgit) for the first half of 2024.
Revenue increased by 2% from a year earlier thanks to favorable exchange rates. But profits were lower due to market volatility, higher taxation, and deconsolidation of subsidiaries, the company said in its interim report for H1 2024.
Lower prices of natural gas and LNG during the first half of the year were also a drag on post-tax earnings as they offset the impact of higher crude oil prices.
Petronas expects "to see more dynamic shifts in the operating landscape for the rest of the year," President and Group CEO, Tengku Muhammad Taufik, said in a statement.
The executive also noted "continued market volatility and global economic slowdown" during the first half of the year.
Looking ahead, Petronas says that "the prolonged geopolitical tensions and macroeconomic uncertainties remain the key drivers of heightened volatility that continue to negatively impact the global market."
The Malaysian company aims to accelerate its energy transition strategy to position itself for future growth, it said.
Petronas remains committed to "ensuring energy security and fostering continued collaboration with stakeholders to safeguard the nation's interests and support nation-building efforts," the state firm noted.
Petronas is faced with the prospect of lower earnings from natural gas as Sarawak, the biggest state in Malaysia, is set to take control of its natural gas assets as the state on the Borneo island is now looking for more autonomy from the federal government.
Sarawak has long sought more royalties from the government of Malaysia and Petronas. However, Sarawak hasn't had much success in this, until the election in 2022, which now makes the federal government coalition dependent on the support of Sarawak Premier Abang Johari Openg.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More