Overview of Petronas Group Results for the Financial Year Ended 31st March 2007
KUALA LUMPUR, Malaysia, June 28 /PRNewswire/ --
The PETRONAS Group delivered another record performance for the financial
year ended 31 March, 2007, amidst a more complex and increasingly challenging
global oil and gas industry environment. The year saw crude oil prices
remaining high as global demand, particularly from the transportation sector,
continued to increase on the back of strong economic growth, especially in
China and India. In the meantime, supply disruptions in Alaska and Nigeria,
coupled with continuing geopolitical tensions in the Middle East, escalated
concerns over security of supply.
Stronger demand amidst heightened threats of supply disruptions, as well
as a lack of refining capacity globally and OPEC crude production
curtailment, pushed oil prices higher during the year under review. The
average price of West Texas Intermediate (WTI) and Brent crudes increased by
8.5% and 12.2% during the review period to USD64.92 per barrel and USD65.08
per barrel respectively. The weighted average price of Malaysian Crude Oil
(MCO) rose in tandem to USD68.50 per barrel, an increase of 11.2%. Prices of
petroleum products also rose, with gasoline and diesel, used mainly by the
transport sector, reaching an average price of USD74.44 (USD66.87 previous
year) and USD77.47 (USD68.59 previous year) per barrel respectively.
Spurred by high oil prices and demand, intensified industry activities
had also driven up costs, often out of proportion with the crude price
increase. For example, upstream capital costs had increased by approximately
21% during the year - more than double the rate of increase in crude prices
over the same period.
Cost escalation and lack of engineering and construction capacity,
coupled with shortage of experienced personnel, had led to project delays and
adversely impacted safety, efficiency and quality of operations. The
continuing cost escalation had also negatively affected the economic
viability of ongoing and planned projects, resulting in many projects being
deferred. In summary, the review period saw oil and gas companies globally
operate in a highly challenging environment as escalating costs overshadowed
gains from high energy prices.
Against this industry environment, the PETRONAS Group recorded an
all-time high revenue of RM184.1 billion and profit before tax of RM76.3
billion, both increasing by approximately 10% from the previous year. The
Group's balance sheet continued to strengthen with total assets rising 7.9%
to RM294.6 billion. Shareholders' funds expanded 16.3% to RM170.9 billion
while Return on Average Capital Employed (ROACE) remained high at 40.9%. The
Group's performance is on par or superior to that of more established players
in the industry.
The year's outstanding financial and operational performance was a
testimony to the success of the Group's overall strategy of integration,
value adding and globalisation. This strategy, coupled with the Group's
effective management policies and operational excellence, has served and
continues to serve PETRONAS well in addressing the challenges encountered by
the volatile and unpredictable oil and gas industry. Notably, PETRONAS'
continuous emphasis on operational efficiency and reliability, as well as the
integrated nature of the Group's operations played a key role in cushioning
the impact of the disproportionate increase in operating cost, enabling the
Group to continue to achieve improved results.
Media Relations Department
Tel : +603-2331-2140
WEBSITE : http://www.petronas.com.my
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