KINIBIZ Is Petroliam Nasional Bhd (Petronas) ready to tighten its belts with earnings falling for the second consecutive financial quarter? The state oil company says that it is preparing for a new era of low oil prices by embracing fiscal discipline but its expensive and risky ventures overseas may suggest otherwise.

“The outlook is not very rosy,” said Petronas’ president and group chief executive officer (CEO) Wan Zulkiflee Wan Ariffin at a major oil and gas conference in Kuala Lumpur on May 17.

And so it proved. A few days later, on May 22,  Wan Zulkiflee presented Petronas’ results for first quarter of financial year 2015 (1Q15), his first since assuming the CEO post in April.

Although it was a slight improvement over the previous quarter 4Q14, which saw Petronas register unprecedented RM7.3 billion in losses and write down RM22 billion in impairments, 1Q15 was still a disappointment.

Both revenue and profit were down for 1Q15. Revenue and profit after taxes fell 21 percent to RM66.2 billion and 39 percent to RM11.4 billion respectively year-on-year (y-o-y), still a substantial drop.

This poor performance was mitigated by several factors including a stronger US dollar due to the fall of ringgit, a 5 percent improvement in Petronas’ production volume, and higher crude oil production from domestic fields.

Overall, the new CEO’s prevailing message since taking over has been for Petronas to be cautious and adopt a new mindset of prudence.

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