KUALA LUMPUR (Aug 28): National oil company Petroliam Nasional Bhd (Petronas) is in a difficult position. Other than the regular issues brought about by the Covid-19 pandemic, such as the disruption to business activities which in turn have slowed down the demand for oil — it is caught between having to reinvest into cleaner sources of fuel to ensure the longevity of its business, while at the same time monetise existing oil and gas assets, and looking at possibly hiving off some of these producing assets.

And as a national oil company, Petronas acts as the custodian of the country’s petroleum resources. So, with oil prices having gained more than 90% since end-October last year, Petronas is likely to be tasked with paying a higher quantum of dividends to its shareholder — the federal government — to help make ends meet in the current challenging climate.

Its president and chief executive officer Tengku Muhammad Taufik Tengku Aziz understands the government’s need for additional funds and said Petronas is always ready to assist when needed, but highlighted that the oil company may undergo challenging periods as well, while waiting for some of its new ventures, be it solar, hydrogen or wind-generated energy, to bear fruit.

Will he be given the leeway to run things as he can best for Petronas?

While Muhammad Taufik is tight-lipped about which assets the national oil company may end up selling, the likelihood is that it will divest some of its oil-producing assets which are not performing up to the mark.

And much of Petronas’ plans — be it the selling of its assets, or the acquisition of new renewable energy assets — will also hinge on how high oil prices trade. While many analysts who cover oil and gas have forecasted it to trade at US$80 per barrel, Muhammad Taufik is a contrarian and feels oil prices are unlikely to sustain at such high levels. 

Read the full story in the latest issue of The Edge Malaysia weekly. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.