KUALA LUMPUR: Cost efficiency will remain as the standard practice for national oil and gas company, Petronas, regardless of global oil prices, said its president and group chief executive officer (CEO) Datuk Wan Zulkiflee Wan Ariffin.
He said since the inception of Cost Reduction Alliance 2.0 (CORAL 2.0) since 2015, the company has been able to save around RM5 billion.
“We are trying hard to make this part of our DNA in Malaysia and even for the oil and gas industry,” he told reporters after a CEO Strategic Dialogue session at the 19th Asia Oil and Gas Conference yesterday.
CORAL 2.0, a continuation of CORAL 1.0 (implemented from 1994 to 2005), is a long-term industry wide programme, driven by Petronas with the aim to inculcate cost-conscious mindset across Upstream Malaysia.
It supports sustainability in the oil and gas industry in the country and prepares for future industry challenges by optimising cost, increasing efficiency and driving industry innovation across all operators.
CORAL 2.0 is a five-year programme from 2015 until 2019.
Wan Zulkiflee said the company would not allow inefficiency to creep back into the system even when the oil price starts to recover.
Today, Brent crude futures traded at US$49.82 per barrel, up 72 cents or 1.47 per cent.
He said although Petronas was seen to have put more effort in the upstream sector, it was putting similar initiative for the downstream sector.
“We have been focusing on upstream because this involves a lot of collaboration with our production sharing contract partners, We do have programmes for the downstream but it may not be as widely publicised as Coral 2.0,” he said.
Meanwhile, he said Petronas had been keeping its capital expenditure consistent throughout the years at between RM50 billion and RM60 billion annually, at 50:50 ratio for upstream and downstream.
Asked on its divestment plan moving forward, Wan Zulkiflee said: “For now, there are some assets owned by Petronas. Although they may not be very big, when the right time comes and if we see any opportunity, we will do it,” he said, adding Petronas had successfully divested its assets in Africa.
Recently, the national oil and gas company was reportedly planning to dispose of its 49 per cent stake in SK316 offshore gas block in Sarawak for US$1 billion.
He reiterated that in the next 20 years, oil and gas would remain Petronas’ core business but it saw opportunity in investing in renewable energy.
“I would not discount, after having done enough assessment and identifying the opportunity, we will also have a serious look and maybe acquire for investment other forms of renewable energy,” he added. — Bernama