Malaysia’s state oil firm Petroliam Nasional Bhd. (Petronas) said it plans to cut capital and operating expenditures by as much as 50 billion ringgit (US$11.4 billion) over the next four years amid plunging oil prices, the Wall Street Journal reported.
The cuts will mean some projects have to be deferred, Petronas chief executive Wan Zulkiflee Wan Ariffin said in an internal memo to staff.
Petronas is the Malaysian government’s biggest source of revenue, accounting for as much as one third of the annual budget.
As the oil price slide continues to weigh on the company’s revenue and earnings, Malaysian Prime Minister Najib Razak is expected to seek amendments to the government’s spending plans, the newspaper said.
The current budget was based on a US$48 a barrel price for Brent crude. The price dropped to US$28 on Friday.
Malaysia is Southeast Asia’s second biggest oil and natural gas producer and the world’s second-largest liquefied natural gas exporter.
Since last year, other state oil firms have been tweaking their business plans in the wake of lower oil prices.
Thailand’s PTT Exploration and Production PCL and Indonesia’s PT Pertamina EP have been cutting capital spending, while Vietnam Oil and Gas Group shut down an oil field.
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