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Malaysian Oil firm Petronas hints withdrawal from South Sudan despite increasing profit by over 100%

Jul 2, 2021 — The Malaysian oil company, Petroliam Nasional Bhd (Petronas), which doubled its profit in oil explorations this year amid global pandemic has hinted withdrawal from South Sudan’s oil exploration due to what it terms as “challenging marketing conditions”.

Petroleum wastes in Unity Oilfields, Unity State (File/Supplied/Nyamilepedia)
Petroleum wastes in Unity Oilfields, Unity State (File/Supplied/Nyamilepedia)

According to Petronas officials who spoke to local Malaysian media house, theedgemarkets.com, Petronas is not intending to participate in South Sudan’s first oil licensing round; however, the oil firm is undertaking a strategic review of its assets to avoid adversarial effects.

“Due to challenging market conditions, Petronas is undertaking a strategic review of its assets to ensure that its portfolio remains resilient and commercially viable” The officials told theedgemarkets.com via email.

“Therefore, Petronas may not be participating in the South Sudan’s first licensing round this year,” they continued.

According to South Sudan’s Petroleum Minister, Mr. Puot Kang Chuol, the First Licensing Round which was attended by ministers of petroleum, oil and gas from different countries, aimed to attract interest from a diverse group of foreign investors.

“The oil licensing round aims to attract interest from a diverse group of foreign investors to a region that is already home to oil and gas majors from China and Malaysia,” The Ministry of Petroleum stead.

Despite citing marketing challenges, the Malaysian oil firm  revealed that the company recorded over 101% profit in its first 2021 financial quarter, increasing its Profit after Tax (PAT) from USD$1.08 billion to USD$2.23 billion.

According to the CEO of Petronas, Tengku Muhammad Taufik, the huge profit amid global pandemic reflects the firm’s continuing commitment to commercial and operational excellence.

“Petronas’ financial performance in the first quarter of 2021 reflects our continuing commitment to commercial and operational excellence while preserving a healthy level of liquidity to strengthen our resiliency,’’ Group CEO of Petronas Tengku Muhammad Taufik said in a press release shared on the company’s website.

“The deliberate steps taken throughout 2020 have provided the Group with a stronger foundation to better withstand volatile market conditions while we contend with the global energy transition,’’ he added.

South Sudan’s oil exploration faces challenges that range from war to environmental factors for which some companies that operated alongside Petronas such as Ludin Oil exploration are currently facing lawsuits in Europe on multiple charges from their past activities.

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