Malaysia's Petronas racks up another record profit

Kuala Lumpur, June 28: Malaysian state oil firm Petroliam Nasional Bhd (Petronas) notched up another record profit on Thursday and paid a whopping dividend to a government expected to call a general election within months.

Malaysia's biggest company posted net earnings of .9 billion for the year ended March 31 from a revised .4 billion in 2005/06, after the price of Malaysia's benchmark Tapis crude rose roughly 11 per cent in the financial year.

The three-year boom in crude oil prices has doubled Petronas profits, bolstering government coffers and the wider economy as the nation prepares for a possible early election, which is widely expected to be called before April 2008.

Petronas paid dividends of 16 billion ringgit (.6 billion) to the government in 2006/07. It is the single-biggest contributor to the state and said it contributed about a third of total government revenue, including taxes and royalties.

Prime Minister Abdullah Ahmad Badawi has stepped up spending on major projects with a billion five-year development plan unveiled in March 2006.

Petronas is expected to play a leading role in an east coast regional development to be announced soon.

Petronas has been one of the few shining successes among Malaysia's state-linked firms and is the most international.

It operates in more than 33 countries and draws about 37 per cent of its revenues from overseas. In financial size, it ranks 30th in the world among oil firms, but it makes almost as much money as No.3 US oil company ConocoPhillips.

The company has expanded abroad as crude oil production slows at home. Petronas said domestic production fell 4.4 per cent to 506,500 barrels per day in 2006/07 from the year earlier.

Chief Executive Hassan Marican portrayed 2006/07 as a challenge for the company which, like the rest of the oil industry, faced problems in meeting demand. He cited shortages of skilled labour and drilling and production rigs.

''It was a tough year for the industry, however, we managed to swim the tide,'' Hassan told reporters.

Revenues rose 14.9 per cent to billion.

Total Malaysian reserves of oil and condensate rose 2.1 per cent to 5.36 billion barrels at January 1, 2007.

Reuters>