AP
Posted: 2008-07-15 05:26:26
KUALA LUMPUR, July 15 (Kyodo) - Malaysia's state-owned oil company Petroliam Nasional Bhd. announced Tuesday a 40.3 percent increase in net profit to a record $18.1 billion for the financial year ended March 31, on the back of higher sales and higher oil prices.
Petronas, Malaysia's biggest and most globalized company, also said it is still interested in Iran's Pars liquefied natural gas project although its partner,
Total SA of France, has canceled its investment over increasing political tension.
"We continue to be interested in operating in Iran. Yes, we know the situation there. I have read the announcement by Total, but as Petronas, we continue to be interested in Iran, " Petronas CEO Hassan Marican told a press conference.
Total, which has a 40 percent stake in the Iran's South Pars project, announced last week it would not spend any more money in the project due to political risk as Iran comes under increasing pressure from the United States to halt its nuclear energy program.
Petronas, which holds a 10 percent share, said it would reassess the project's cost structure.
The remainder of the consortium is held by National Iranian Gas Export Co.
"But on the LNG project specifically, where we are in a consortium with Total, I have said previously that we cannot come to a final decision on that particular project because of the increase in cost and because we have not completed our discussion with the Iranians," Hassan said.
Whether Petronas will go it alone on the project, he said: "We are capable and able to undertake the LNG projects but there are other factors. So we have to make an assessment."
The South Pars field holds around 14 trillion cubic meters of gas, about 8 percent of world reserves.
Petronas's aggressive expansion overseas has paid off handsomely for the company.
The group, which also controls several listed units such as shipping firm Malaysia International Shipping Corp. Bhd., retail gasoline station operator Petronas Dagangan Bhd. and gas distributor Petronas Gas Bhd., saw revenue rose 29.8 percent from the previous year to $66.2 billion.
But for the first time, the biggest contributor to revenue came from the group's international operations, which generated 40.3 percent of total revenue.
The high oil prices brought windfalls to Petronas and also to the Malaysian government, with Petronas now the single largest contributor to government revenues.
For the 2007 financial year it paid a total of 67.6 billion ringgit ($21 billion) in taxes, dividends, royalties and export duties, up from 52.3 billion ringgit the previous year.
Out of the 67.6 billion ringgit, 62.8 billion ringgit went to the federal government and made up 44 percent of government's total revenue.
The rest went to the state governments.
But despite the company's payments to the government, its huge profits became a political issue after the government decided to raise retail gasoline prices by nearly 41 percent and diesel prices by 63 percent.
Led by the opposition, there have been calls for the government to use Petronas's profits to subsidize fuel prices but Hassan said it would be dangerous for the government to do so.
"Given the volatile nature of the industry, given the fact that we are investing into new development of reserves at high cost, should there be a major downturn in the oil price, then the ability to maintain the high results would be a real challenge and would then have a major impact on government revenue," he warned.
He added that the 67.6 billion ringgit total payment to governments for the year represented 63.1 percent of the group's total profits even as operating costs are rising.
For example, he said, daily charter rates for drilling rigs have recently gone up almost 300 percent and the average price of steel has risen 225 percent.
