Local O&G sector to benefit from higher Petronas capex
KUALA LUMPUR (Dec 8): Local oil and gas (O&G) players are expected to benefit from the rise in domestic capital expenditure (capex) by Petroliam Nasional Bhd (Petronas), said analysts.
Maybank IB Research, citing a 34% year-on-year (y-o-y) increase in Petronas' domestic capex, said its top picks in the sector include Yinson Holdings Bhd, Dialog Group Bhd and Hibiscus Petroleum Bhd.
"Meanwhile Bumi Armada Bhd, Velesto Energy Bhd, Wah Seong Corp Bhd and Malaysian Marine & Heavy Engineering [Holdings Bhd] are our small and mid caps 'buy'," it said.
It said Petronas is on track to meet its RM100 billion earnings target for FY2022 after the national oil company posted strong nine-month financial results with core net profit of RM72 billion, up 173% y-o-y.
“We expect oil price to remain elevated, as the winter period approaches and geopolitical risk remains high,” it said, adding that crude oil average estimate for FY2022 is unchanged, at US$100 per barrel (Brent).
“We do not rule out a higher oil price outlook in FY2023 considering the continued tightness in the global supply market, due to the prolonged structural under-investment since 2015,” it added.
Maybank also noted Petronas’ efforts in carbon emissions abatement and scaling up investment allocation on carbon neutral projects.
“With its NZCE 2050 pathway announced on Nov 1, 2022, Petronas has set a near-term target to cap operational emission to 49.5 million tonnes of CO2e by 2024 in Malaysia and achieve 25% absolute emissions reduction groupwide by 2030 (based on 2019’s baseline),” it said.
It said for this, Petronas will allocate 20% of its capex for decarbonisation projects and expansion into cleaner energy solutions over the next five years (2023 to 2026). Petronas targets 50% improvement in cashflows from operations by 2025 and 30% growth in revenue from new non-traditional business by 2030.
External headwinds remain
The Bursa Energy Index continues to track the falling crude oil prices, which fell to almost a year low of US$77.69 per barrel on Thursday (Dec 8) morning.
At 11am, the index was down 12 points at 775.81, with more losers (12) than gainers (five).
Leaders include Wah Seong Corporation Bhd (up 5.7% at 64.5 sen), Reach Energy Bhd (up 10% at 5.5 sen) and Icon Offshore Bhd (up 3% at 15.5 sen). Among the laggards were Dayang Enterprise Holdings Bhd (down at 3% at RM1.30), Hibiscus Petroleum (down 3.17% at RM1.02) and Petron Malaysia Refining & Marketing Bhd (down 0.94% at RM4.22).
Investors are assessing the implications from the price cap imposed on Russian crude, and China’s relaxation on Covid measures on crude oil prices.
Meanwhile, International Energy Agency (IEA) in a recent statement said the energy security concerns caused by Russia’s invasion of Ukraine have motivated countries to increasingly turn to renewables such as solar and wind to reduce reliance on imported fossil fuels, whose prices have spiked dramatically.
Global renewable power capacity is now expected to grow by 2,400 gigawatts (GW) over the 2022-2027 period, an amount equal to the entire power capacity of China today, according to Renewables 2022, the latest edition of the IEA’s annual report on the sector.
http://www.theedgemarkets.com/article/local-og-sector-benefit-higher-petronas-capex
Singapore Investment
-
-
-
No surprise that AI’s bagging the bucks4 hours ago
-
-
I Bought MPACT4 hours ago
-
-
-
-
Brutal bruising of some Stock Indices12 hours ago
-
Portfolio Update12 hours ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Beware Of Scams1 day ago
-
-
-
Buying a home for face2 days ago
-
-
-
-
-
-
-
-
-
-
-
-
Finance Investment Movement 445 days ago
-
-
-
-
Going REITs Shopping Again6 days ago
-
-
Weekly Markets Outlook6 days ago
-
Market indeed coming down6 days ago
-
Cory Diary : Dividend Q1 '246 days ago
-
-
-
-
-
-
-
-
Banks and Miles Report – Mar 20241 week ago
-
-
Revisiting Bitcoin1 week ago
-
-
-
-
-
-
2024 (Portfolio Update)2 weeks ago
-
-
-
-
Retirement Journey Update for March 20242 weeks ago
-
-
-
1Q 2024 Investment Strategy Update2 weeks ago
-
-
Portfolio Summary for March 20242 weeks ago
-
Reasonable Dividend Yield 2024Q23 weeks ago
-
-
-
Portfolio (March 30, 2024)3 weeks ago
-
-
-
QAF #77 - 2023 Annual Report3 weeks ago
-
Lentor Hills Residences3 weeks ago
-
Burnt out!3 weeks ago
-
-
-
Feb 2024 Expenditure3 weeks ago
-
-
Starting Our Second Property Cycle4 weeks ago
-
-
-
-
-
-
-
-
-
Feb 2024 Portfolio1 month ago
-
-
Summary of February 20241 month ago
-
The Market Is A Scam!1 month ago
-
-
-
-
-
-
-
-
Options Trading Journal Jan 20242 months ago
-
-
-
-
-
-
-
-
End of 2023 Review3 months ago
-
-
Year 2023 DIYQuant Portfolio Performance Report3 months ago
-
Monthly Summary of November 20234 months ago
-
3 Simple Poker Strategies for Beginners4 months ago
-
Migration of website4 months ago
-
-
Abandon REITS?4 months ago
-
-
-
-
-
-
-
-
-
August 2023 Portfolio Updates7 months ago
-
-
-
-
Hello SP Group, I'm Back!9 months ago
-
-
-
-
A New Light11 months ago
-
-
-
-
-
-
-
Demoralized1 year ago
-
2022 Thoughts, Hello 2023!1 year ago
-
Series of Defaults for Maple Finance1 year ago
-
Takeaways from “Sea Change”1 year ago
-
-
Greed is Coming Back1 year ago
-
-
-
-
-
-
-
-
-
-
-
What is Overemployment1 year ago
-
-
-
-
-
-
-
-
-
-
-
Home
ARMADA
articles
DAYANG
DIALOG
HIBISCS
ICON
PETRONM
REACH
VELESTO
WASEONG
YINSON
Local O&G sector to benefit from higher Petronas capex