The target may be achievable given that last year alone the company’s revenues were $95 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $40 million.
Vice president for exploration and production Dato’ Wee Yiaw Hin, Malaysia’s representative at the Ascope conference in Vietnam, told delegates at the chief executive summit that revenues were “very robust” and Petronas expects this to continue in 2013 and increase going forward.
Petronas generates much of its income from overseas assets, but there has also been success on the domestic front – Malaysia last year accounted for 72% of the oil and gas discoveries in the region.
He said, however, that Malaysia is facing challenges: “The easy oil is over (meaning there is a) need to be creative and innovative”.
The South-East Asian nation, through Petronas, has embarked on a three-pronged strategy.
*Increasing production from existing assets through enhanced oil recovery (EOR). Two such pilot projects are already on stream and Tapis is set to follow in 2014;
*New contract models such as the risk service contract (RSC) that offer solutions to exploit marginal fields. The third RSC project is due to start production by year-end. There is also the progressive volumes PSC that gives larger shares to contractors which exploit “difficult” fields;
The government has also lowered petroleum income tax from 38% to 35%.
In addition, there are better tax breaks for EOR projects, ultra-deepwater and high-pressure/high-temperature operations.
Malaysia last year was home to 22 oil and gas discoveries with a combined 1.4 billion barrels of oil equivalent recoverable reserves.