Petronas Keeps Eye Out for Shale Assets
http://online.wsj.com/article/SB10001424052702304259304576373030718744452.html
By ANKUR RELIA
KUALA LUMPUR, Malaysia—Petroliam Nasional Bhd. reported a 36% jump in fiscal-year profit and said it is open to acquiring more shale assets as the state-owned company seeks to bolster its exposure to nonconventional energy sources.
"The future is going to be gas, be it conventional or unconventional. Moving forward we have to get into unconventional gas," President and Chief Executive Shamsul Azhar Abbas Shamsul said Wednesday. "We remain open to further acquisitions. I think over the last three to four years we have been left behind with regard to catching up to become a global energy player, so it's basically catching up for us."
Petronas, as the company is known, recently bought half of Progress Energy Resources Corp.'s working interest in the Altares, Lily and Kahta properties in northeastern British Columbia for $1.1 billion. Petronas will work with Progress to develop a portion of its Montney shale assets in the area.
With the deal, Petronas joined other global oil companies investing in shale, including Chinese state-owned oil company Cnooc Ltd. and Norway-based Statoil ASA.
Mr. Shamsul said Malaysia needs to find additional supplies of gas. "As far as Malaysia's requirement is concerned, there has been a shortfall over the last three years. We continue to have a shortfall," he said.
He said the company, the country's only Fortune 500 company and the country's most profitable firm, soon will announce a gas-field development off the Malaysian peninsula's shore. Gas from the project will last for 10 to 15 years, he said.
Petronas's earnings received help from gains and higher oil prices.
Net profit rose to 54.85 billion ringgit ($18.25 billion) for the year ended March 31, compared with 40.29 billion ringgit a year earlier.
Revenue rose 14% to 241.23 billion ringgit.
The company booked a gain of 9.2 billion ringgit from the stock-market listing of Petronas Chemicals Group Bhd. and Malaysia Marine & Heavy Engineering Holdings Bhd. in the third quarter. Earnings before income tax, depreciation and amortization—which excludes the gain—rose 18% to 107.9 billion ringgit.
Return on average capital employed increased to 17.5% from 15.9%, Mr. Abbas said.
Crude-oil prices have been rising in recent months as expectations that supply disruptions from the political conflicts in the Middle East and North Africa threatens would spread to neighboring large oil-producing countries.
Petronas said it plans to spend 300 billion ringgit over the next five years to replace or refurbish its Malaysian oil and gas production assets, which average between 19 years and 28 years old. The company had forecast spending between 250 billion ringgit and 280 billion ringgit.
Mr. Shamsul said additional financial resources will be required for mergers and acquisitions to drive growth and outpace escalating costs.
Write to Ankur Relia at ankur.relia@dowjones.com
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