Tuesday, March 1, 2016

More financial pressures for Petronas as energy company outlines cost cutting plans

Malaysian energy giant Petronas, the parent company of Pacific NorthWest LNG is facing more cost cutting measures at its Kuala Lumpur head office, with two media releases in recent days highlighting some of the steps that the company is taking to address some of its financial pressures.

Yesterday in a media statement, Petronas outlined the struggles that 2015 provided to the company, a year which delivered lower revenue and profit amidst the environment of depressed oil prices. Noting that its financial performance will continue to be affected by those conditions through 2016.

Among the cost cutting measures that they plan to take this year, will be additional cuts to Capital and Operational expenses over the next four years.

Though Petronas President and Group Chief Executive Officer, Datuk Wan Zulkiflee Wan Ariffin did not offer much in the way of guidance as to how they plan to achieve those cuts, other to state that they intend to put in place a new organizational structure effective April 1st.

Today, Petronas outlined the scope of that new corporate structure, something that will result in what Petronas calls the redundancy of under 1,000 positions, with those departures set to come into place over the next six months.

A Malaysian Report has Petronas
seeking additional partners or a larger
investment share from current ones for
it's proposed Lelu Island LNG project
There was no mention in either of the statements from this week as to the status of their holdings in foreign countries, including the Pacific NorthWest LNG project proposed for the North Coast.

One Malaysian news source, the Malaysian Reserve, notes that Petronas is expected to look for additional partners to join in on the Canadian LNG project, or ask that current shareholders increase their investment into the proposed development.

That publication also noted that the original plan for commercial operations for 2019 is likely to now be deferred until 2022 or 2024.

The Pacific NorthWest LNG project is currently in the final public comment phase of its environmental process

After the March 11th deadline for comment the Canadian Environmental Assessment Agency will submit its findings to the federal cabinet, with the Environment Minister to deliver the government's final decision after that report has been received.

Some more notes on the news out of Malaysia can be found here.

Petronas May Cut 1,000 jobs as Oil Slump prompts reorganization
Petronas expects 1,000 redundancies under group-wide revamp
Petronas may lay off 1,000 staff
Petronas may need to raise funds
Malaysia's Petronas to cut about 1,000 positions after strategic review
1,000 positions in Petronas may be made redundant
Petronas announces overhaul affecting nearly 1,000 jobs, cuts over next 6 months
Petronas May Need to Raise Debt, Tap Cash Amid Oil's slump

More items related to the Pacific NorthWest LNG project can be found on our archive page.

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