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PETRONAS Optimistic On Recovery Despite Challenging And Volatile Outlook

2021 Media Release - 26 Feb

KUALA LUMPUR, 26 February 2021 – The year 2020 proved to be an extraordinary year which saw the confluence of the coronavirus pandemic, OPEC+ alliance’s failure to conclude timely production accord and continuing energy market imbalances that severely impacted global energy demand and oil prices. Despite facing these challenges and the acceleration of the energy transition, PETRONAS today announced a commendable performance for its financial year ended 31 December 2020.

The Group delivered strong operational performance during the year through the implementation of risk mitigation efforts as immediate responses to unfavorable market conditions, as well as deliberate steps to strengthen its resiliency. Together with this, PETRONAS remains focused on operational efficiencies, commercial excellence and fiscal discipline across its value chain.

For the fourth quarter of 2020, the Group recorded improved results as compared to the preceding quarter, mainly due to the increase in Liquefied Natural Gas (LNG) sales volume, aided by a modest recovery in oil prices. 

As uncertainties over the impact of the coronavirus pandemic remain, PETRONAS will continue to take decisive measures of reshaping its portfolio mix, retooling its human capital equation and emphasising on focused execution with pace in weathering the challenges, guided by its three-pronged growth strategy. 

Tengku Muhammad Taufik, President and Group Chief Executive Officer, PETRONAS 

“PETRONAS has weathered the toughest period in the Group’s history. As we go forward, we anticipate the oil and gas industry to still be impacted by uncertainties shaped by significant events of 2020. 

“Notwithstanding this, the Group remains committed to undertake all the necessary measures in our path to recovery while ensuring the safety of our people and minimal disruption to our business. We are focused on our tactical interventions towards preserving value and continue to pursue customer-centric solutions. 

In supporting our commitment towards sustainability and our Net Zero Carbon Emissions by 2050 aspiration, we aim to continue delivering cleaner energy solutions through our technological advancements whilst simultaneously realising growth pathways amidst the accelerated pace of energy transition.”

FY2020 Results (Analysis against FY2019)

Preserving cash and maintaining liquidity; focused on cost-compression efforts


Excluding impairment, PETRONAS Group recorded Profit After Tax (PAT) of RM10.5 billion for the year ended 2020, a decrease of 78 percent compared to RM48.8 billion in the previous financial year in line with lower revenue realised, partially offset by lower Group Costs incurred.

The lower Group Revenue recorded RM178.7 billion against RM240.3 billion in the previous financial year was largely due to the effects of plummeting oil prices which saw lower average realised prices for all products, along with demand disruption resulting in lower sales volume from processed gas, petroleum products and LNG. 

In response to the strong headwinds from reduced demand and lower oil prices, the Group has responded by immediately taking several decisive and prudent measures to ensure the resiliency and sustainability of its operational and financial positions, with increased focus on cost compression, fiscal discipline and higher productivity. Such efforts have positively cushioned the adverse macroeconomic impact to the Group’s financials with lower Group Costs incurred during the year (excluding impairment) of RM172.7 billion compared to RM197.3 billion in the previous financial year. The Group has also successfully exceeded the cost targets set in May 2020 which was to reduce OPEX and CAPEX by 12 per cent and 21 per cent respectively.    

The cost compression efforts implemented along with continued tight fiscal disciplines adopted have resulted in the delivery of positive Cash Flows from Operating Activities (CFFO) of RM40.7 billion, albeit 55 per cent lower than the RM90.8 billion in the previous year. This is a commendable performance given the gravity of situation faced and reflects PETRONAS’ effective management of its integrated business in generating healthy CFFO which provides comfortable liquidity cover to meet the Group’s Capital Investments (CAPEX) of RM33.4 billion.

The downward revision in commodity price outlook is further compounded given the accelerated pace of energy transition. This has resulted in most oil and gas companies, including PETRONAS taking significant impairment loss provisions on their assets during the year. 

In line with the rest of the industry, PETRONAS registered a RM31.5 billion impairment charged on assets during the year, resulting in the Group reporting a Loss After Tax (LAT) of RM21.0 billion as compared to Profit After Tax (PAT) of RM40.5 billion in 2019.

Nevertheless, the Group’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) remained strong at RM55.3 billion.

Fourth Quarter (year-on-year) 2020 Results 

Modest recovery of Q4 results

For the quarter ended 31 December 2020, the Group recorded PAT before impairment of RM0.2 billion, as compared to RM9.4 billion in the same quarter last year, primarily due to lower revenue and higher net other expenses. This was partly negated by lower tax expenses.

Strong CFFO generated of RM8.1 billion during the fourth quarter 2020 was mainly attributed to the modest demand recovery coupled with improved prices largely from LNG. 

During the quarter ended 31 December 2020, an impairment loss on assets of RM1.3 billion was provided for, resulting in LAT of RM1.1 billion as compared to PAT of RM4.1 billion in the corresponding quarter last year.

The Group continued to generate a strong positive EBITDA of RM11.9 billion.


  • Cautiously optimisticchallenging outlook with modest recovery in demand and price as the COVID-19 impact continues.
  • Realising growth pathway to secure new opportunities amidst the accelerated energy transition, especially in new and non-traditional areas.

The outlook of the industry remains uncertain and challenging with modest recovery in demand and prices as the COVID-19 impact continues. The emergence of fresh cases and repeated lockdowns to contain the pandemic, will continue to pose a challenge to the industry. 

PETRONAS remains cautiously optimistic and is looking to future-proof its portfolio by venturing into new energy spaces and pursuing innovation with focused execution. 

The Group remains confident that its efforts and continued focus on commercial and operational excellence while preserving healthy levels of liquidity will ensure its business sustainability.

We are also charting the growth pathway to secure new opportunities amidst the acceleration in energy transition, especially from new and non-traditional areas. Although gas remains a crucial and cleaner source of fuel, diversification into Renewable Energy is imperative, with having the right skills and capabilities in place as part of the Group’s retooling human capital effort.

Update on PETRONAS’ Response to COVID-19 

  • Ensuring business continuity and value preservation during COVID-19.
  • Total contribution towards the COVID-19 efforts and initiatives stands at close to RM44 million.

Since the COVID-19 outbreak in March 2020, PETRONAS enforced preventive health and safety measures to keep employees, customers and contractors safe. Special working arrangements have also been implemented for all our employees who can work from home to do so where possible. 

Safety is PETRONAS’ utmost priority. In preserving this, an effective pandemic crisis management is imperative to ensure business continuity and value preservation. The Group has continued its business operations by leveraging on digitalisation, technology and equipping its workforce with the necessary digital skills and competencies. The new ways of working created a safer and efficient work environment that maintains uninterrupted supply of energy to support the daily requirements of communities, businesses and partners. 

The Group also contributed towards the COVID-19 efforts and the value of its efforts and initiatives stands at close to RM44 million. Outlined below are a number of key highlights: 

  • In March 2020, through Yayasan PETRONAS, we contributed RM20 million worth of medical equipment and supplies to help hospitals and healthcare front-liners mitigate the spread of COVID-19 in Malaysia. The efforts were carried out in stages in collaboration with the Ministry of Health and National Disaster Management Agency. Apart from hospitals and healthcare front-liners, PETRONAS also contributed to the B40 Group in conjunction with festive celebrations, amounting to RM1 million. 
  • In April 2020, PETRONAS staff across the globe also voluntarily donated towards COVID-19 support efforts, altogether amounting to RM6.4 million through salary contributions. Additionally, PETRONAS employees have also backed donation drives by the Company’s affiliated organisations such as the Association of Wives and Women Staff of PETRONAS (PETRONITA), Badan Kebajikan Islam PETRONAS (BAKIP), Dana Asy-Syakirin PETRONAS and Kelab Sukan dan Rekreasi PETRONAS (KSRP).
  • In addition, Yayasan PETRONAS also delivered RM2.5 million worth of medical equipment and Personal Protective Equipment (PPE) to hospitals across Sabah to support the efforts of medical front-liners in mitigating COVID-19 cases in the state in November 2020.
  • As at 31 December 2020, RM5.3 million worth of medical equipment, PPE, hand sanitisers, disinfectants, and face masks, as well as food supplies were distributed to the communities in our domestic and international operations including Azerbaijan, Brazil, Brunei, Canada, Gabon, India, Indonesia, Iraq, Mexico, Myanmar, South Sudan and Suriname.

Operational Highlights – FY2020 


  • 17 projects achieved first hydrocarbon (14 Malaysia, 3 international).
  • 13 projects achieved Final Investment Decision (9 Malaysia, 4 international).
  • Five exploration discoveries.
  • Continued leveraging on digital tools and platforms for end-to-end technology solutions.  
  • Implementing projects for zero continuous venting and flaring of hydrocarbon which achieved approximately 12.5 per cent reduction in GHG emissions and 27 per cent total gas recovery

  • On the back of the low oil price and reduced demand brought about by the prolonged impact of COVID-19, Upstream recorded a total daily production average of 2,209 thousand barrels of oil equivalent (BOE) per day, lower by 8.2 per cent than the 2,406 thousand BOE per day recorded in 2019. In addition, PETRONAS continues to strive to conform to Malaysia’s voluntary production adjustment as agreed collectively during OPEC+ Ministerial Meetings, in line with OPEC+’s Declaration of Cooperation. 
  • During a challenging 2020, Upstream successfully achieved the following:
    • A total of 17 projects achieved first hydrocarbon comprising nine Brownfields and five Greenfields in Malaysia as well as one Brownfield in Indonesia and Oman respectively, and one Greenfield in Indonesia.
    • A total of 13 projects achieved Final Investment Decision (FID), of which nine are in Malaysia, two in South Sudan, one in Turkmenistan and one in Brazil. 
    • A total of five exploration discoveries – one offshore United States (US) Gulf of Mexico, two in the Salina Basin offshore Mexico, one in Suriname and one in Malaysia.
  • PETRONAS deployed various technologies and digital applications which have helped reduce cost and increased productivity, efficiency and accessibility across its Upstream operations. This included:
    • a first in Malaysia remote operations platform piloted at Resak, offshore Terengganu which has a potential of 30 per cent OPEX reduction.
    • Execution of exploration and development workflows and adoption of next generation petro-technical platforms from industry leading technology partners. Software as a Service (SaaS) and Infrastructure as a Service (IaaS) solutions enabled high value and high-risk projects which improved up to 30 per cent overall efficiency of Field Development Plan (FDP) studies.
  • In line with our commitment towards achieving Net Zero Carbon Emissions by 2050, PETRONAS is implementing projects for zero continuous venting and flaring of hydrocarbon at our Upstream assets, with an estimated total projected Greenhouse Gas (GHG) reduction of approximately two million tCO2e/year and total gas recovery projection of about 33 MMscfd. From these projects, Upstream achieved approximately 12.5 per cent reduction in GHG emissions and 27 per cent total gas recovery.

Gas & New Energy 

  • Successfully weathered a challenging year troubled with market volatilities as a reliable provider of cleaner and renewable energy solutions.
  • Successfully delivered 11,547 LNG cargoes from the PETRONAS LNG Complex (PLC) in Bintulu.
  • 10 LNG cargoes have been loaded by PFLNG SATU, the world’s first Floating LNG Production Unit.
  • PFLNG DUA progressing towards first LNG cargo planned for Q1 2021 following first drop of LNG achieved in February 2021. 
  • As a reliable provider of cleaner and renewable energy solutions, Gas & New Energy (GNE) business successfully weathered a challenging year by establishing adaptive measures to optimise production while ensuring contractual obligations are met. This saw PETRONAS adopt an agile operating philosophy to preserve and protect value while mitigating impact of softer demand and lowered prices. In this regard, GNE leveraged on PETRONAS integrated gas value chain to respond effectively to the volatile market environment and continued to expand our market presence. These efforts saw PETRONAS secure up to 1,050 mmscf in new natural gas sales with over 6.5 MTPA concluded in LNG deals in 2020, covering contract extensions, servicing new customer segments and entries into new markets.
  • PETRONAS has completed 62 Virtual Pipeline System (VPS) deliveries at the end of 2020 following the solution launch in September 2020. The VPS solution enables PETRONAS to open new market segments by delivering LNG using road trucks fitted with cryogenic ISO tanks to customers located away from the national gas pipeline network. In growing the use of LNG as a cleaner marine fuel, PETRONAS completed its maiden commercial bunkering delivery at Pasir Gudang via MV Avenir to Siem Aristotle on 9 November 2020. Whereas offshore Sabah, PETRONAS continues to achieve progress for its two floating LNG (FLNG) facilities with the PFLNG SATU loading a total of 10 LNG cargoes from the Kebabangan gas field. The PFLNG DUA, located at the Rotan gas field, is progressing towards its first LNG cargo planned for Q1 2021, following first LNG drop achieved in February 2021.
  • In line with the Company’s Stepping-Out strategy and Net Zero Carbon Emissions by 2050 aspiration, PETRONAS has continued to diversify its suite of cleaner energy solutions and has gone beyond hydrocarbon sources. In November 2020, PETRONAS established its Hydrogen business under GNE and entered a partnership with Sarawak Energy Berhad to explore the commercial production of green hydrogen and its value supply chain in Asia. These efforts will supplement the blue hydrogen that PETRONAS is already producing as a by-product at its facilities.
  • On the renewable energy front in Malaysia, PETRONAS’ New Energy business has more than 90MWp of solar solutions under development focusing on commercial and industrial customers, including solar rooftop installations for 15 TESCO Malaysia stores with completion planned for Q1 2021. Internationally, PETRONAS New Energy’s 100 per cent owned distributed energy company, Amplus Energy Solutions (Amplus), has over 800MWp of solar capacity under operation and development in India and South East Asia, with 625MWp total capacity commissioned with a balance of 175MWp of projects under development. The growth in solar capacity was a result of Amplus’ acquisition of two solar projects, totalling 140MWp, from Acme Solar in India. Through these newly acquired projects and newly commissioned capacity, PETRONAS continues its expansion as a clean energy provider and is now capable of providing clean energy to India’s utility sector, in addition to commercial and industrial sectors.


  • PCG delivered strong overall petrochemical production volume of above 10 million metric tonnes, contributed by a strong plant performance and reliability. 
  • Beyond fuel, PDB continued to reinvent its retail offerings through the Makan@Mesra initiative.

  • Despite unprecedented challenges in FY2020, Downstream business sustained its operational performance and accelerated strategic plans to generate business value and new revenue streams. Operationally, the OEE recorded a sustained performance of 90 per cent across all business segments with domestic refineries recording a slight improvement of 97 per cent compared to the same period last year, while the refinery in Durban, South Africa registered OEE of 81.6 per cent. 
  • As at 31 December 2020, Pengerang Integrated Complex (“PIC”) is on-track in transitioning to commercial operations, with focus on operational readiness to achieve safe, reliable, and efficient operations. Following the reinstatement of the Movement Control Order, the start-up of the Refinery and Petrochemical plants is expected in the second half of 2021, subject to safe and satisfactory completion of the remaining project work.
  • PETRONAS Chemicals Group Berhad (PCG) strengthened its footprint during this challenging period, delivering a strong overall petrochemical production volume of above 10 million metric tonnes, contributed by a strong plant performance and reliability. The overall Plant Utilisation recorded 94.3 per cent, slightly higher than the same period last year, whereas sales volume recorded 8.2 million metric tonnes. PCG is also exploring new opportunities through its expansion in the specialty chemicals market with the development of a new Nitrile Butadiene Latex (NBL) plant in Pengerang and Ethoxylates plant in Kerteh. Both plants are expected to cater to the growing demand in Southeast Asia and the Asia Pacific regions.
  • The sharp decline in petroleum product prices and movement restrictions have contributed to a 23 per cent drop in PETRONAS Dagangan Berhad’s (PDB) overall sales volume compared to 2019. A similar trend was observed for our international operations, PETRONAS Lubricants International and Engen Petroleum, recording a drop of 3.4 per cent and 7.2 per cent respectively in their sales volume. As domestic activities slowly resume, PDB saw a gradual recovery in the second half of the year. To sustain its market share, PDB introduced its best fuel yet, the PETRONAS Primax 97 with Pro-Race in December. As part of its non-fuel business growth strategy, PDB reinvented its retail offerings by expanding its food and beverage products through the Makan@Mesra initiative which addresses the increasing demand for food-to-go solutions. To date, there are nine PETRONAS stations that offer Makan@Mesra, with plans to expand up to 200 stations by the end of 2021. Recently, PDB was voted as Malaysian’s favourite automotive fuel and lubricants brand at the prestigious Putra Brand Awards for the 11th consecutive year. In addition, Engen was voted as South Africa’s Coolest Petrol Station brand for the 11th consecutive year, as well as the favourite petrol station brand for the 10th consecutive year.
  • Beyond carbon emissions, Downstream business also contributed to positive social impact through PDB’s Love Local campaign, in line with its Small and Medium Enterprise programme which has supported local entrepreneurs’ business in the past 25 years. PDB currently has over 350 local vendors supplying to its Kedai Mesra nationwide. In addition, SEEd.Lab, Malaysia's first 12-month Social Enterprise programme, has successfully delivered its first cohort and will enter its second cohort this year. In partnership with Tata Consultancy Services, SEEd.Lab aims to shape a sustainable future through digital and technology while addressing youth unemployment in Malaysia.

Issued by

Media Engagement Department
Group Strategic Communications

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