The sale of gas assets in Azerbaijan is part of PETRONAS’ ongoing asset and portfolio revaluation efforts, Minister in the Prime Minister’s Department (Economy) Datuk Sri Mustapa bin Mohamed said in Parliament
He said that these decisions are made based on long-term commercial assessments, as well as cost compression to ensure operational as well as commercial resilience and excellence.
In a reply to a question from the opposition leader and MP for Port Dickson, Datuk Seri Anwar Ibrahim, Mustapa said that these steps need to be taken to maintain a strong financial position.
“In this case, not only the assets in Azerbaijan are involved, but also other assets that have fulfilled their potential are also considered, either for sale or for reduced asset ownership, Mustapa said
The Minister said that the decision taken by PETRONAS is in line with the PETRONAS group’s strategy to ensure a focused, competitive and sustainable upstream portfolio.
“Assets in Azerbaijan have been identified as one of the assets for sale or with permission, a candidate for the exit since 2019 again,” Mustapa said.
However, he said that the sales process takes time to ensure that the sale price of the 3 assets can provide a fair and reasonable value to PETRONAS.
“2020 is a very challenging year and the sale of assets in Azerbaijan last year is certainly not appropriate,” Mustapa said
He said that the sale of these assets is also in line with PETRONAS ‘ three-pronged strategy, namely: a. maximize cash flow generation; growing core business; and stepping-out or venturing into new business sectors.
Furthermore, he said that the payment of PETRONAS dividends to the Federal Government is based on a careful assessment by the PETRONAS Board of Directors. Dividend payments are based on current financial conditions and performance
“The approval of the RM18 billion dividend payment in February 2021 is based on performance and market in 2020 ending December 2020,” the Minister said.
This amount is lower than the previous year due to the impact of a very weak market and low global crude oil prices as a result of the COVID-19 pandemic.
An additional dividend of RM7 billion was approved in July 2021. It is based on the ability and projected better performance of the oil market for 2021.
For the first ten months of this year, the average Brent price recorded about USD69 per barrel. The approval for the sale of Azerbaijani assets was made on 1 October 2021 after obtaining the approval of the Board of Directors of PETRONAS
