Petronas 1Q net profit drops 4.7% with 2013 profit likely flat

MOSCOW (MRC) -- Malaysia's state energy company Petronas or Petroliam Nasional Bhd. has announced that first-quarter net profit slipped 4.7% from a year earlier but 2013 earnings may still be steady on higher output, according to The Wall Street Journal.

The company is Malaysia's only Fortune 500 company and the Southeast Asian country's most profitable enterprise. Petronas pays about USD10 billion in annual dividends to the government, making it the single largest contributor to state coffers.

Net profit for the three months ended March 31 was 17.56 billion ringgit (USD5.7 billion) compared with MYR18.43 billion a year earlier, Petronas said in a statement. Revenue rose 1.9% in the period to MYR76.68 billion from MYR75.25 billion.

Petronas's operation in South Sudan resumed production in March this year after 15 months of disruption, although contribution to earnings will be marginal this year. Output will pick up from 2014, Shamsul Azhar Abbas, president and group chief executive of Petronas, said at an earnings conference.

As MRC informed previously, German chemical giant BASF SE and Malaysia's Petronas Chemicals Group announced late April 2013 that they will invest USD500 million to build an aroma ingredients production facility in the eastern state of Pahang. The project is part of an existing joint venture between BASF and the petrochemical arm of Malaysia's state energy company Petroliam Nasional Bhd that stretches back to 1997. BASF holds 60% in the joint venture, with the rest owned by Petronas. The partners plan to produce citral, L-menthol and citronellol--ingredients used to make fragrances and flavors that will end up as personal care and food products -- that will cater to demand from the Asia Pacific. Initial production will start in 2016.
MRC

MOSCOW (MRC) -- The board of Russian oil firm TNK-BP Holding, controlled by state-controlled Rosneft, has recommended the company pay no dividends for 2012 in a move that investors have warned could damp interest in Russian stocks, reported The Wall Street Journal with reference to TNK-BP's announcement.

As MRC wrote previously, Rosneft acquired a 95% stake in TNK-BP, Russia's third-largest oil company, on March 21 from BP PLC (BP) and its partners, a group of Soviet-born tycoons.

Minority shareholders in TNK-BP had hoped for a share swap, a large dividend or a buyout on similar terms to the deals, worth a total of $60 billion. But Rosneft Chief Executive Igor Sechin has said there will be no buyout. He said May 23 that dividends will be paid out at 25% of net profit from March 21, when Rosneft's deals to take over TNK-BP closed. The company's previous owners are responsible for any dividends for before that date, he said.

Rosneft said Thursday it is setting up a committee to work with minority shareholders.

After buying TNK-BP, Rosneft has become the world's largest public oil company. The company accounts for about 5% of global oil production, and its proven reserves by the international category will exceed 5 billion tonnes of oil equivalent.
MRC

MOSCOW (MRC) -- Exxon Mobil Corporation, the largest privately owned US oil company and one of the largest companies in the world, has announced that shareholders elected a new member, William C. Weldon, to its board of directors, reported the company on its site.

Weldon, 64, served as chairman and chief executive officer of Johnson & Johnson from 2002 to 2012, vice chairman from 2001 to 2002 and as worldwide chairman, Pharmaceuticals Group, from 1998 to 2001. Weldon earned a Bachelor of Arts degree in biology from Quinnipiac University in Hamden, Connecticut, in 1971.

With the addition, the ExxonMobil board stands at 13, 12 of whom are non-employee directors.

We remind that, as MRC reported earlier, in late May 2013, ExxonMobil started ethylene production at a new chemical unit in Singapore after expansion. With the start-up of the steam cracker, the company will increase production at other petrochemical units in the Singapore complex over the next few weeks. ExxonMobil is set to become the largest petrochemicals company operating in Singapore. The company already has a 605,000bpd refinery operating on Jurong Island, as well as an existing petrochemical plant (completed in 2001, at a cost of USD2bn), which has the capacity to produce 800,000t per year of ethylene and has downstream plants to produce polyethylene and polypropylene.

Exxon Mobil Corporation, the largest publicly traded international oil and gas company. It produces about 3% of the world's oil and about 2% of the world's energy. ExxonMobil posted a net profit of USD9.5 billion in Q1 2013, while over the same period in 2012, this index was USD9.45 billion. Thus,company increased its net profit by 1% or USD50 million.
MRC

MOSCOW (MRC) -- BP PLC, one of the world's largest energy and petrochemical companies, has announced that the completion of the modernization project at its Whiting Refinery in Indiana remains on track for the end of June, as per The Wall Street Journal.

The project, which required the shutdown in November of Pipestill 12, the refinery's largest of three crude units, will enable the refinery to process up to about 85% heavy crude, compared to 20% before completion, by reconfiguring the crude unit and starting up a new delayed coker unit to replace an old one. It is now the second largest delayed coker in the world at about 102,000 barrels a day.

A person familiar with refinery operations said the process of starting major, brand new grass roots equipment like BP Whiting's is methodical and involves a lot of steps, including introducing oil, but that doesn't mean streams will be coming off the tower in the next few days.

The Whiting Refinery has the capacity to process up to 413,000 barrels of oil a day, and producing up to 15 million gallons of refined products.

We remind that, as MRC reported earlier, BP has completed the previously announced sale of its Carson, California refinery and related logistics and marketing assets in the region to Tesoro Corp. for approximately USD2.4 billion as part of a plan to reshape BP’s US fuels business. Cash proceeds from the sale include approximately USD1.075 billion for assets and an estimated USD1.35 billion primarily for inventory at market value and other working capital.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- The net profit for Petroliam Nasional Bhd (Petronas) in the first quarter ended March 31, 2013 slipped 2.73% to RM20.37 billion from RM20.94 billion a year ago due to lower crude oil prices and higher costs, partially offset by increased production, said Mmail.

Its revenue, however, rose 1.89% to RM76.68 billion against RM75.25 billion on the back of improved trading volume in crude oil and gas sales, combined with better demand from customers and the strengthening of the US dollar to the ringgit.

Compared against the final quarter of last year, the national oil company saw its net profit jump 132.34% to RM20.37 billion from RM8.77 billion — which it attributed to impairments taken in the previous period, better average fuel prices and higher production.

Quarter-on-quarter, revenue was down a marginal 0.26% from RM76.88 billion previously. For the whole year, Petronas expects a pretax profit of RM89 billion — equal to last year, as a lower average oil price offsets a targeted 2% rise in production.

Petronas president and chief executive officer Tan Sri Shamsul Azhar Abbas yesterday said Petronas hoped to double production in Canada from the current 51,000 barrels of oil equivalent per day by next year.

"Production from Canada and Malaysia presently makes up for a smaller contribution from Sudan, which resumed production in March with output expected to rise to 120,000 barrels a day by mid-2014 from 200 barrels currently."

Production from Sudan, which is estimated by Moody’s Investors Service to account for 7% of Petronas’ total hydrocarbon production in 2011, was halted last year on geopolitical concerns.

Shamsul added that Petronas would reach its final investment decision for the RM60 billion Rapid project in Pengerang, Johor by March, pushing back the deadline for the commissioning of the facility’s first phase to end-2016 or early 2017.

"We are inching towards almost half trillion ringgit in assets and should have reached it by now," said executive vice president for finance Datuk George Ratilal.

He said the option to purchase the 5% stake at the OGX oilfields in Brazil would be exercised if the RM850 million investment becomes profitable.

As MRC wrote earlier, Petronas has signed an agreement with Eni-controlled Versalis to jointly own, develop, construct and operate elastomer plants within Petronas" proposed refinery and petrochemical integrated development (RAPID) complex in Pengerang, Johor. The proposed joint venture will produce and market synthetic rubbers using Versalis" technology license and technical know-how, the companies said.
MRC