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Malaysia’s Petronas will reduce its 2020 capital expenditures by 21%

Malaysian state-run oil and gas company Petronas plans to reduce its capital expenditures by 21% and its operating costs by 12% in 2020, due to the COVID-19 pandemic, collapsing energy demand and falling oil prices. The company originally planned to spend MYR50bn (US$11.5bn) in 2020. Most of the capital expenditures cuts will be made outside of Malaysia, but some domestic projects are likely to be delayed due to the impact of the pandemic. Petronas invested only MYR8.5bn (US$1.95bn) during the first quarter of 2020.

In 2019, Petrona’s total production volume reached 2.4 Mboe/d (+2%). In January 2020, Petronas signed a 12-year term agreement with Shenergy (owned by the government of Shanghai (China)) to deliver 1.5 Mt/year of LNG to its Wuhaogou receiving terminal in China. The contract will start from 2022, and also comprises a shipping partnership to build and charter new mid-sized LNG vessels for the cargo delivery.