Petronas to step up security after Saudi attacks, warns on oil price volatility

BP Desk

Malaysia's state-owned energy giant Petronas said it would beef up security at its plants after an attack on a Saudi hub last weekend, and warned oil price volatility in the rest of the year could affect its year-end performance, report agencies. 

Heightened vigilance over security comes as the firm, known in full as Petroliam Nasional Bhd, nears the start of commercial operations at a $27 billion refinery and petrochemical project built jointly with Saudi Arabia.

Oil prices jumped by as much as a fifth after an attack on a key Saudi Arabian supply hub last weekend. Petronas said the market was expected to remain volatile in the second half due to the protracted U.S.-China trade war, sluggish demand and a slowing global economy.

"These prevailing uncertainties are expected to pose challenges to the overall year-end performance of the Petronas Group," it said in a statement.

Petronas's president and chief executive Wan Zulkiflee Wan Ariffin told reporters that last weekend's drone and missile attack in Saudi Arabia was "an escalating risk".

"I think we are familiarising ourselves with the technology," he said, according to state news agency Bernama.

Petronas said work at its Saudi-partnered refinery and petrochemical project, the Pengerang Integrated Complex in the southern state of Johor, was 99.7% completed as of June 30. It was hit by a fire in April.

The firm reported on Friday an 8% rise in second-quarter profit after tax to 14.7 billion ringgit ($3.52 billion), up from 13.6 billion ringgit in the same period last year.

The increase was boosted by foreign exchange fluctuations, but was partially offset by higher product costs.

Revenue fell marginally to 59.1 billion ringgit from 59.2 billion ringgit, mainly due to lower average sale prices for petroleum products and liquefied natural gas (LNG).

For the first half of the year, Petronas' total oil production volume rose 1.4% from the same period last year. Sales of LNG were up 5%, the firm said.

Petronas also confirmed that Mohamad Anuar Taib, the CEO of its upstream business, will be leaving the firm this week, Bernama reported.

The company had denied reports of his departure in June, but now says that Mohamad Anuar had asked to resign for personal reasons.

"We have a strong succession plan in place, and (his departure) does not have any impact to our business plans going forward," chairman Ahmad Nizam Salleh was quoted as saying.