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Monday, February 29, 2016

Petronas to cut expenditure by RM15b to RM16b for 2016

KUALA LUMPUR - Petroleum Nasional Bhd (Petronas) is going to reduce its capital expenditure and operational expenditure for 2016 by between RM15bil and RM20bil due to the low crude oil prices.

President and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin said the cuts would include revision and negotiation of contracts such as risk sharing contract, enhanced oil recovery and second floating liquified natural gas (PFLNG2).

"Company's cash flow from operation is unlikely to be able to cover capex and dividend commitments to the government," he told reporters at the Petronas financial year 2015 results on Monday.

He added that Petronas might tap into the debt market and its cash reserves if necessary to fund its capex.

In FY15, Petronas' cash flow dropped 33% to RM69.6il from RM103.6bil in 2014. Total cash inflow in 2015 totaled up to RM98.5bil while cash outflow was RM98bil.

For the fourth quarter ended Dec 31, 2015, Petronas posted a net loss of RM3bil due to RM12.9bil assets impairment. Revenue for the quarter fell 24% to RM60.1bil from RM79.4bil in same quarter in FY14.

Cumulatively, for FY15, the group reported a 56% decline in profit after tax to RM20.8bil from RM47.6bil in FY14. Revenue for the period fell 25% to RM247.7bil.

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