KUALA LUMPUR, Aug 30 — Crude oil prices are likely to correct from 2023 but would normalise to pre-pandemic level, Petroliam Nasional Bhd (Petronas) said.
President/group chief executive officer Datuk Tengku Muhammad Taufik Tengku Aziz said the group was cautious in the current crude oil prices and noted that the current high prices were due to underinvestment in the last five years.
“The eventual cyclicality of this industry will take effect. There will be correction. Right now, what we see the elevated oil prices is on the back of underinvestment in the past five years. People are reacting and getting back on the investment cycle.
“After two or three years of no final investment decision (FID) in the energy space, we have seen now it climb back to 470 million tonnes worth of online capacity,” he told reporters after Petronas’ first-half ended June 30, 2022 financial performance announcement here today.
Recently, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said “extreme” volatility and lack of liquidity meant that the oil futures market is increasingly disconnected from fundamentals and the Organisation of Petroleum Exporting Countries and its allies (OPEC+) might be forced to cut production.
At the time of writing, Brent crude was down 2.5 per cent to US$102.50 (RM458.70) per barrel.
Asked whether Petronas would consider to renegotiate tenders with its vendors, Petronas executive vice president and upstream chief executive officer Datuk Adif Zulkifli said the group was in the midst of renegotiating with its vendors to find solutions on rising input costs. He added that drilling costs have surged significantly by 200 per cent on some daily rates. — Bernama
