PUTRAJAYA, Jan 20 – Petronas’ dividend contribution to the government this year will be slightly lower than the previous contribution as the amount would be calculated based on last year’s crude oil price. Dispelling misconceptions that the national oil corporation’s contribution to the government would be severely slashed due to the slump in crude oil prices, Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah said the amount, which has already been decided by Petronas, would be announced soon.
“Last year, the price was strong whereby in June Brent crude oil was sold at US$115 per barrel. “It (amount) will be slightly lower but not that much of a drop in dividends,” he told reporters after a briefing on the special address on measures to strengthen Malaysia’s economic resilience by Prime Minister Datuk Seri Najib Tun Razak here Tuesday.
It was reported that Petronas had said on Dec 1, 2014 that low oil prices were forcing a 15-20 per cent scale-back in its capital expenditure for this year while dividends to the government could go down as much as 37 per cent if oil prices remained low.
Mohd Irwan Serigar said the dividend contribution for next year was uncertain as the global Brent crude oil price remained volatile, given the uncertainty as to what the Organisation of the Petroleum Exporting Countries (OPEC) would or would not decide with regards to production cut.
So far, OPEC has not agreed to cut back production while oil from non-OPEC countries as well as shale and gas production has added to the glut. However, quoting analysts’ reports, he said the declining trend in oil prices would only be temporary, with the Brent crude oil price expected to rebound towards year-end.
Earlier, during the briefing, Mohd Irwan Serigar said the government’s oil and gas-related revenue for this year had been reduced to 21 per cent from the earlier projection of 26 per cent due to the fall in Brent crude oil price. The revenue for 2015 Budget is now calculated based on US$55 per barrel against the initial US$100 per barrel, which was set back in October 2014.
Should the Brent crude oil price falls further, he said the government had lined up some measures to counter this, without jeopardising its delivery system growth and others. In addition, Mohd Irwan Serigar said despite several revisions made for this year, the country would likely achieve its balanced-budget target by 2020.
“We are taking a more realistic kind of approach and our balanced-budget target by 2020 is on track as this situation is just temporary,” he said. He said Malaysia was not totally dependent on the petroleum sector as the economy is diversified with services and manufacturing sectors being the drivers of growth.