By DayakDaily Team
KUCHING, Jan 10: Any potential capital expenditure cut (capex) cut by Petronas following the gas distribution agreement with Petros Sarawak will likely not exceed RM10 billion annually, Kenanga Investment Bank Bhd’s (Kenanga IB) research analysts observed.
In a report today, it said: “We estimate that any potential capex cut by Petronas due to this agreement would not exceed RM10 billion annually, a modest reduction from its projected RM60 billion per year.
“We believe that the calculation is justified, considering that Sarawak must still pay for the LNG infrastructure previously developed by Petronas, including LNG trains and liquefaction plants.”
It also believed it is in the mutual interest of Petros and Petronas to eventually ramp up
upstream investments to maximise their long-term revenue potential.
According to news reports, Prime Minister Datuk Seri Anwar Ibrahim had confirmed discussions on gas distribution in Sarawak between Petronas and Petros have concluded after months long delay since July last year.
The government is now refining the agreement’s details and implications.
Overall, Kenanga IB said, regional national oil companies remain in capex expansion mode, and once Petros’ gas agreement details are finalised, Petronas could ramp up its spending by the second half of this year. — DayakDaily
