Malaysia's Petronas warns of project delays, aims to keep local capex

Petronas is the sole custodian of the petroleum resources in Malaysia. PHOTO: PETRONAS/FACEBOOK

KUALA LUMPUR (REUTERS) - Malaysian state energy giant Petronas said the risks of delays to some of its projects were rising due to prolonged coronavirus-related lockdowns around the world.

Petronas, which operates in more than 20 countries including Brazil and the United States, said in an email that it would try to maintain its domestic spending for this year.

The company forecast 2020 domestic capital expenditure of 26 billion ringgit (S$8.5 billion) to 28 billion ringgit, higher than last year.

"The ongoing global spread of the Covid-19 outbreak and collapse in oil prices continue to impact financial markets as well as many economies and industries around the world," Petronas said in an emailed statement on Monday (April 13).

"At this point we will strive to maintain our domestic CAPEX programme. However, there are increasing risks of some projects being delayed due to the prolonged lockdowns implemented globally and in Malaysia, and further disruptions anticipated to the global supply chain and service providers."

The company, formally known as Petroliam Nasional Bhd, last month evacuated all its 80 Malaysian employees from an operation in Iraq as a precautionary measure as the coronavirus spread.

Petronas is the sole custodian of the petroleum resources in Malaysia, the world's third-biggest exporter of liquefied natural gas by capacity.

In a bid to arrest a massive fall in energy prices due to a fall in demand, Malaysia has joined the Organization of the Petroleum Exporting Countries (OPEC) and other nations in reducing output by 9.7 million barrels per day (bpd) in May and June, equal to nearly 10% of global supply.

Malaysia, which has the second highest number of coronavirus infections in Southeast Asia with more than 4,800 cases, is in the middle of a March 18-April 28 partial lockdown.

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