PETRONAS Integrated Report and Financial Report 2024

Tan Sri Tengku Muhammad Taufik

Dear Stakeholders,

The year 2024 was beset by wave upon wave of political change and technological disruptions that reshaped global markets, trade policies, and the operating landscape at large. The radical shifts and the volatility in their wake have reinforced emphasis on energy security and affordability among countries around the world against the backdrop of a still-fragile global economy.

As PETRONAS crossed its 50-year mark in 2024, we remained steadfast in executing our Energy Transition Strategy with the aim of ensuring we would continue being able to deliver more value to shareholders and stakeholders reliably, responsibly and sustainably.

Alhamdullilah, we continued to grow our diverse portfolio through a relentless focus on operational and commercial excellence, strategically positioning the Group in order to remain resilient and dynamic in the ongoing energy transition.

Safety at the Forefront

The safety and well-being of our people remain our paramount priority.

In 2024, PETRONAS worked to reinforce safety culture and measures to create a safer working environment, recording zero major fire incidents and a 13 per cent reduction in Loss Time Injury.

Despite our best efforts, we regrettably recorded two tragic incidents that resulted in the loss of lives. We are deeply saddened by the loss suffered by their friends and families. The Group is now even more determined to do better towards delivering the only acceptable target in this regard – zero fatalities and injuries.

Delivering Value Reliably and Responsibly

Amid persistent uncertainty in the global landscape, PETRONAS made steady progress in our Energy Transition Strategy, which remains a clear and pertinent guide in the pursuit of long-term growth.

I am pleased to report that PETRONAS managed to deliver steady financial performance in 2024, with a Profit After Tax (PAT) of RM55.1 billion on the back of RM320.0 billion in revenue. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) stood at RM114.1 billion for the year under review.

The Group remained steadfast in its philosophy of practicing prudent financial management and disciplined capital allocation in an increasingly complex ecosystem. This ensured that we continued to drive long-term value, even as we reduced emissions as set out in the PETRONAS Net Zero Carbon Emissions (NZCE) by 2050 Pathway.

The milestone accomplishments in 2024 include:

Expanded global portfolio through 20-year extension for the Ketapang Production Sharing Contract (PSC) and a multi-year contract for the Bobara Working Area in Indonesia, acquisition of 50 per cent share of the Papua New Guinea Prospecting License and third concession of Onshore Block 2 in Abu Dhabi, United Arab Emirates.

Produced a record-breaking 2,000 thousand barrels of oil equivalent (kboe) per day from Malaysia operations.

Awarded 14 PSCs in the Malaysia Bid Round 2024 to 12 unique contractors.

Reached final investment decision (FID) for a 100MW power plant in Malaysia while making good progress towards first cargo from LNG Canada in 2025 and bringing onstream our third floating LNG facility by 2027.

Expanded maritime solutions on offer with seven contracts for vessel newbuilds and entered a joint venture to procure liquified carbon dioxide (LCO₂) carriers, adding to the current fleet of 102 LNG, petroleum and product vessels, as well as 12 Floating Production, Storage and Offloading (FPSO) and Floating Storage and Offloading (FSO) vessels.

Reached FID to construct a biorefinery in the Pengerang Integrated Complex in Malaysia with partners Enilive and Euglena, expected to be operational by 2028.

Signed a Memorandum of Cooperation to advance ASEAN grid interconnectivity with the export of renewable energy from Vietnam to Malaysia and Singapore.

Expanded renewables portfolio in India with a 200MW co-located solar-wind turbine project, 400MW interstate transmission system-connected wind-solar hybrid project, and delivery of 650MW renewable energy for the country’s first renewable energy-green hydrogen production.

Entered a joint venture to develop a global scale hydrogen production hub in Malaysia with SEDC Energy.

Progressed towards large-scale carbon capture and storage (CCS) deployment with 11 agreements and Memoranda of Understanding to carbon dioxide storage solutions, infrastructure and value chain development, as well as regulatory compliance and certification.

Achieved the short-term GHG emissions target by limiting emissions from Malaysia operations to 46.55 million tonnes of CO₂ equivalent, below the target limit of 49.50 million tonnes of CO₂e, as laid out in our Net Zero Carbon Emissions by 2050 Pathway.

Transformation for Long-Term Resilience

As the oil, gas and energy industry weathered a tumultuous year of mounting market pressures, continued margin erosions and intensified geopolitical risks, it also became glaringly evident that reindustrialisation, deglobalisation and the artificial intelligence (AI) revolution are now set to collectively contribute to a surge in worldwide energy demands.

These contrasting complexities occurred as PETRONAS reached its remarkable 50-year milestone. Even as we celebrate in the achievements brought forth by steadfast focus on our strategy – strengthening Core Business, pursuing opportunities in New Businesses and responsibly managing emissions – the Group has now set in motion a transformative exercise to strengthen our long-term resilience against the current backdrop.

Measures in this regard are already being undertaken in an objective, transparent and respectful manner, including:

Increasingly prudent capital allocation and targeted reinvestment, with sharper focus on value accretive and revenue-generating businesses.

Pursuit of strategic partnerships and novel collaborative models, such as satellite models, equity partnerships and joint ventures to pursue returns even as risks multiply in the operating environment.

Transformation of our workforce by creating a fit-for-purpose structure, aligning process with purpose.

Reallocating resources and amplifying efforts to eliminate inefficiencies.

The Group is confident that this undertaking, as challenging as it may be, will place PETRONAS in an even more competitive and resilient position to grow our international portfolio and secure market positions with focused agility.

Importantly, the measures will ensure that we can continue to discharge our Amanah or duty of trust as Malaysia’s national oil company – providing energy security, generating economic growth and contributing towards the nation’s sustainability ambitions.

It is vital to also highlight that amid this transformation, PETRONAS will remain unwavering in our commitment to deliver on our decarbonisation targets as set out in our NZCE by 2050 Pathway. In this regard, PETRONAS can register that we have made continued progress since its introduction in 2020, and we continue to contribute to Malaysia’s National Energy Transition Roadmap as well as its Nationally Determined Contributions.

Moving Forward with Purpose

In our first 50 years, PETRONAS has evolved significantly. From our humble beginnings as the regulator of Malaysia’s oil and gas resources, we have evolved into an integrated and dynamic global energy company. We have contributed towards developing a thriving local oil and gas sector and fortified our reputation as a trusted energy and solutions partner, contributing to societies wherever we operate.

Together with our growing global footprint, PETRONAS has also built a strong reputation as a regional voice advocating for a just and equitable energy transition with collaboration as its cornerstone. With Malaysia taking up the mantle as chair of ASEAN and as PETRONAS once again partners with CERAWeek by S&P Global to organise the second edition of Energy Asia in 2025. The coming year is shaping up to be one of accelerated action towards the energy future of our collective vision.

In this opportunity, permit me to record my gratitude for the dedicated service of PETRONAS’ global workforce, the exemplary leadership and support of the Executive Leadership Team, and the strong support of governments, authorities, stakeholders and partners, whose valued contributions have made the Group’s accomplishments possible.

I would also like to extend my appreciation to our Chairman, Tan Sri Dato’ Seri Mohd Bakke Salleh, and the PETRONAS Board of Directors for their trust and valuable counsel through a period of immeasurable uncertainty.

As the amazing employees tirelessly strive to strengthen PETRONAS’ foundations for its next 50 years and beyond, I look forward to the progress we will continue to make together in delivering a sustainable future for all.