Malaysia’s Petronas Flags Challenges as Profit and Production Slump
Malaysia’s national energy giant Petronas booked lower revenues and profits amid falling oil prices and a challenging macro and operational environment, which also led to a 3% decline in first-half oil and gas production.
Petronas reported a 24% decline in revenues and a 19% drop in profit after tax, due to divestments, unfavorable foreign exchange rates, and lower average realized prices from petroleum products, crude oil, and condensates following the downward trend in benchmark prices.
The national oil company’s average total daily production of 2.403 million barrels of oil equivalent per day (boepd) in the first half of 2025 was 3.2% lower compared to the 2.482 million boepd for the same period in 2024, mainly due to lower gas production from domestic operations and lower liquid production from the international portfolio.
Petronas has been struggling to boost output in Malaysia, while the volatile and challenging macro environment in the first half of the year contributed to the lower earnings and deepened the crisis.
In June, the company announced it would reduce its total workforce by about 10%, “as it navigates a polycrisis driven by global pressures, coupled with heightened challenges to unlock the full potential of its oil and gas resources in Malaysia.”
Commenting on the first-half results, Petronas President and Group CEO, Tengku Muhammad Taufik, said “PETRONAS remains unwavering in our commitment to strengthen our business and portfolio resilience for long-term growth amid an increasingly challenging macro environment in the first half of 2025.”
The executive referred to the business environment as “increasingly daunting headwinds.”
Petronas is navigating global market and operational challenges, and is undergoing a strategic transformation with a focus on portfolio high-grading and strategic partnerships, as well as enhanced productivity and cost efficiency, it said.
The Malaysian NOC expects “oil prices to remain subdued due to persistent geopolitical tensions, macroeconomic uncertainties, evolving regulatory landscapes and accelerated unwinding of OPEC+’s production cuts which will continue to reshape global energy dynamics and trade flows.”
By Charles Kennedy for Oilprice.com