State-owned energy firm Petroliam Nasional Bhd (Petronas) on Friday raised its dividend payment commitment to the government after reporting that second-quarter profit quadrupled because of higher oil prices and improved margins.

But Petronas maintained a cautious outlook, saying its overall year-end performance is expected to be "fair" as oil price volatility continues.

The energy firm's second-quarter profit rose to RM7.06 billion from RM1.68 billion in the corresponding quarter last year. Revenue rose 10 percent to RM51.63 billion.

"Despite higher oil prices compared to a year ago and overall stronger financial and operational performance, the industry remains volatile, and we are tempering our optimism," chief executive officer Wan Zulkiflee Wan Ariffin said at a news conference.

"We temper our outlook because we are conservative," he said, adding that the softer outlook does not have an impact on the dividend payout to its sole shareholder, the Malaysian government.

Petronas, Malaysia's only Fortune 500 company, will pay the government RM16 billion this year up from its earlier commitment of RM13 billion, said Wan Zulkiflee.

The increase was recently approved by the board due to the company's financial performance, he said. Petronas last year paid the government RM16 billion and RM26 billion in 2015.

Petronas' dividends last year accounted for 7.5 percent of total government revenue.

The money will add to the government coffers at a time when it has announced infrastructure projects to build momentum for a general election that Prime Minister Najib Abdul Razak is required to call by the middle of 2018.

Cost cuts

Petronas, like other oil majors, has taken a hit from lower oil prices. Brent crude, currently above US$52 a barrel, is now less than half what it was in mid-2014.

The energy firm has focused on cutting costs amid expectations that the low oil price environment will continue.

Petronas has said it will slash spending by RM50 billion from 2016 to 2019. It has also saved RM7 billion from other cost optimisation efforts, Wan Zulkiflee told Reuters last week.

"The price of oil today, at around US$50 per barrel, this is the level we must take as the norm," Wan Zulkiflee said. He expects oil prices at US$49 per barrel at the end of the year and in the "high US$40s" in 2018.

He said Petronas has decided to divest its position in Algeria and concluded a partnership in Cameroon, as part of the company's portfolio review.

Last month, Petronas scrapped its proposed US$29 billion liquefied natural gas export terminal project in western Canada due to soft prices.

On Friday, Wan Zulkiflee said the termination would cost the company a total of RM1.5 billion after tax. About RM700million would be impairment charges, while the rest will be paid to TransCanada, which was set to build a pipeline for the project.

"(We are) looking at our options and finalising our strategy on how to monetize our North American gas assets. All options are being looked at," Wan Zulkiflee said.

- Reuters