Kenanga IB Sees Petronas Capex Cut Not Exceeding RM10 Bln After Petros Gas Deal

KUALA LUMPUR, Jan 10 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) has estimated that any potential capital expenditure (capex) cut by Petroliam Nasional Bhd (Petronas) following a gas distribution agreement with Petros in Sarawak would not exceed RM10 billion annually.

The investment bank said the reduction was modest from Petronas’ projected RM60 billion capex per year.  “We believe that the calculation is justified, considering that Sarawak must still pay for the liquefied natural gas (LNG) infrastructure previously developed by Petronas, including LNG trains and liquefaction plants,” said Kenanga IB in a research note today.

Additionally, the investment bank reckons it is in the mutual interest of Petros and Petronas to eventually ramp up upstream investments to maximise their long-term revenue potential.

According to a recent news report, discussions on gas distribution in Sarawak between Petronas and Petros have concluded, with the government now refining the agreement's details and implications. 

Kenanga IB said regional national oil companies remained in capex expansion mode, and once Petros’ gas agreement details are finalised, Petronas could ramp up its spending by the second half of 2025. 

-- BERNAMA