by DayakDaily Team
KUCHING, Feb 7: Petroliam Nasional Bhd’s (Petronas) dispute on gas rights in Sarawak turned out “favourably” for the national oil-and-gas company, with minimal impact expected on its earnings, says CreditSights, Fitch’s research arm.
According to a news report by The Edge Malaysia today, CreditSights said Petronas’ loss of gas distribution rights in Sarawak is not an “outsized consequence” as the company would probably see a decline in earnings between a single-digit percentage and 11 per cent.
“We are also comforted by the Government of Malaysia’s strong continued state support for the national oil company,” CreditSights was quoted as saying in a note to clients.
However, CreditSights cautioned that there are risks ahead for the national oil company.
Given the outcome of the gas deal with Sarawak, it noted that Petronas could see potential attempts by other states seeking greater control over their oil and gas resources. This, it said, could weaken Petronas’ monopoly over Malaysia’s oil and gas industry.
The report further pointed out that Sarawak could pursue additional rights beyond gas distribution, such as LNG distribution, upstream LNG production, oil production, and sales, which could further impact Petronas’ dominant position in the industry.
Regulatory uncertainty and instability could also deter investors, leading to reduced investment and slower industry development, CreditSights said. – DayakDaily
