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Meet Petronas, Malaysia's main cash pipeline

Monday, July 02, 2012 - 02:49

July 2 - Malaysian energy giant Petronas funds about 45 percent of the country's budget -- making it all the more crucial that it tackles concerns about dwindling supplies and government interference. Lisa Yuriko Thomas reports.

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The gleaming Petronas twin towers - Malaysia's shiny iconic landmark. This is also where you'll find the headquarters of Petroliam Nasional Berhad - or Petronas, for short. The state-owned oil & gas giant largely financed the property. Petronas is Malaysia's only fortune 500 company, almost as big as Procter and Gamble. It contributes nearly half of the country's budget which last year hit nearly $60 billion dollars. That's a tall order for any company. From upstream to downstream, Petronas has a hand in every part of the oil & gas process. And not just at home. It's become a global oil and gas business. The company has 40,000 plus workers operating in over 30 countries. Revenues last year clocked in at a whopping 77 billion dollars, up 14% from 2010. International operations and exports made up the bulk of that. Petroleum was the top selling product with crude oil and LNG rounding out the top three spots. Petronas isn't listed, but some of its subsidiaries are. They include a chemical group, a gas company, and an offshore infrastructure firm. Malaysia's prime minister, Najib Razak, appoints the company's CEO and board. But it's not all smooth sailing for Petronas. Malaysia's reserves of oil and gas are drying up fast, and the company is facing a drop in production. So it's having to step up its exploration missions, digging deeper and looking further overseas. (SOUNDBITE) (English) EXECUTIVE VICE PRESIDENT, GAS & POWER BUSINESS, PETRONAS, DATUK ANUAR AHMAD, SAYING: "This is the golden era of gas. So we want to participate in that. So if we cannot find gas in Malaysia, we have to go find gas outside. So we will continue to find gas and oil outside of Malaysia." Analysts and investors also say they're worried that the government's grip on Petronas may stifle its competitiveness. The company helps fund lavish "prestige projects" such as Putrajaya. The purpose-built administrative capital 25 kilometres south of Kuala Lumpur is known for its vast roadways and grand buildings, but has also been called a "ghost town." The company's fate also hinges on an upcoming election. The southeast Asian country is widely expected to re-elect its current Prime Minister. His party has been in power for the past 5 decades. But it may be a close fight. All this adds up to an increasingly uncertain future for Petronas as it fights to strike a balance between profits, government interests and limited resources. Lisa Yuriko Thomas, Reuters.

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Meet Petronas, Malaysia's main cash pipeline

Monday, July 02, 2012 - 02:49