Chairman's Letter

The prolonged tensions that defined the year under review have culminated in an ongoing conflict in West Asia as I pen this note. Accordingly, at the time of publication, the world continues to contend with significant disruptions to the energy system resulting from this conflict. This has further underscored the critical importance of energy to national security and the global economy.

As the economic landscape at large continues to be reshaped by these new realities, it falls upon industry players to collectively build a more resilient and reliable ecosystem capable of withstanding volatility. This was precisely what PETRONAS’ efforts had been focused on in 2025.

Guided by our Energy Transition Strategy, PETRONAS laid strong foundations that enabled us to deliver a resilient performance for the year in review while ensuring security of energy supply for Malaysia and customers around the world. The Group’s commitment towards our purpose as a progressive energy and solutions partner remains unwavering and this will continue to steer us forward.

Delivering Our Mandate

Over the past 50 years, the energy industry has evolved significantly, becoming increasingly interconnected and complex. Throughout this period, PETRONAS has continued to diligently discharge our obligations to Malaysia, with a clear focus on long-term growth.

For the year under review, the Group delivered a scheduled dividend payment of RM32.0 billion to the Government of Malaysia. PETRONAS also remains the sole contributor to the National Trust Fund established to ensure future generations of Malaysians will benefit from its natural resources. In 2025, we contributed RM500.0 million to the Fund, bringing the cumulative total to RM14.0 billion.

Since 1974, PETRONAS has contributed nearly RM1.6 trillion in overall economic value to the nation through dividends, royalties, taxes, cash payments, and other means.

Strengthening Ecosystem Resilience

Beyond fiscal contributions, PETRONAS, as the national oil company of Malaysia, works in close coordination with our key stakeholders to build a robust and resilient energy sector that serves the nation’s long-term interests.

Part of our efforts in this regard focuses on nurturing a strong and competitive Oil and Gas Services and Equipment (OGSE) ecosystem. PETRONAS does so through initiatives that provide support to small and medium enterprises (SMEs) by developing technical capabilities, improving access to financing, and providing industry insights. In doing so, we aim to unlock the potential for these players to compete, innovate and scale.

To date, PETRONAS’ Vendor Development Programme has benefitted 173 SMEs, which are now competing more effectively in the OGSE ecosystem. Meanwhile, 1,022 companies participated in the PETRONAS Supplier Support Programme since its inception in 2024, where they were guided on the adoption of sustainability principles and practices across their businesses.

In 2025, the Government of Malaysia rolled out the BUDI MADANI RON95 (BUDI95) programme, a targeted subsidy for RON95 petrol, for which PETRONAS played a key role in supporting its operationalisation. Through integration with our station infrastructure and mobile application, PETRONAS supported this large-scale national initiative through to successful implementation, delivering tangible value for Malaysians who rely on the system every day.

These efforts demonstrate the effectiveness of PETRONAS’ collaborative approach with government and industry partners in advancing sustainable progress within a dynamic and interconnected energy ecosystem.

Creating Positive Impact

PETRONAS believes that holistic and sustainable progress can only be achieved when it is made alongside communities. Since inception, we have established long-standing efforts to create positive social impact in Malaysia and in global communities where we operate.

Under the PETRONAS Powering Knowledge® Education Sponsorship programme and other youth development initiatives, thousands of students have gained access to quality education and leadership development opportunities. Since 1975, PETRONAS has invested over RM3.8 billion through PETRONAS Powering Knowledge® Education Sponsorship, benefitting more than 40,000 Malaysian students.

Beyond this, PETRONAS contributed over RM500.0 million through social impact programmes during the year under review, impacting a large number of individuals worldwide. These programmes were carried out in close collaboration with ministries and local partners, ensuring meaningful impact was made where the communities needed them the most.

Pathway to a Sustainable Future

Since the launch of PETRONAS’ Net Zero Carbon Emissions by 2050 Pathway, the Group remains committed in our efforts to manage emissions in support of Malaysia’s national commitments. While industry trends have seen a notable shift from energy transition to energy addition, PETRONAS’ pragmatic approach is envisaged to guide the Group towards our aspiration while still delivering energy reliably.

Since 2013, PETRONAS has reduced its annual emissions by 22.2 million tonnes of carbon dioxide equivalent (MtCO2e) through the implementation of emission reduction projects across our operationally controlled assets.

Further to this, PETRONAS has reinforced its commitment to protecting and conserving nature through two clear targets: no net loss of biodiversity in existing operations from 2030 onwards and net positive impact for all new projects from 2024 onwards. The Group also introduced resource efficiency targets in Malaysia to be achieved by 2030. These include a 14 per cent reduction in freshwater used in water-stressed areas and an 82 per cent hazardous waste circularity target.

Moving Forward

The past few years have fundamentally reshaped the operating landscape. Looking ahead, we expect sustained volatility in key market dynamics, even as global energy demand continues to grow.

PETRONAS has always adopted a prudent approach of disciplined capital allocation, underpinned by strong governance and risk oversight. This has enabled us to establish a solid foundation focused on liquidity, value-accretion and long-term growth.

The Board is confident that the measures taken to enhance agility and sharpen strategic clarity will bolster the Group’s resilience, paving the way for us to continue delivering energy and value to our stakeholders and customers.

Moving forward, PETRONAS remains committed to nurturing our invaluable partnerships with governments, partners, employees and communities. Through collaboration and engagement, we will continue to foster greater alignment and encourage regional discourse on energy affordability, security and transition pathways as we did in 2025, through our support of Malaysia’s ASEAN Chairmanship and Energy Asia.

Acknowledgments

On behalf of the Board, I would like to extend my appreciation to Tan Sri Tengku Muhammad Taufik, President and Group Chief Executive Officer, and the Executive Leadership Team for their steadfast commitment in helming the Group through a challenging operating year.

I also convey my sincere gratitude to all PETRONAS employees for their unfaltering and indomitable dedication, and for upholding the timeless PETRONAS Shared Values in an environment that demanded swift adaptability and rigorous execution.

Finally, I would like to thank our valued stakeholders for their continued confidence in PETRONAS. As we prepare for the year ahead, we remain steadfast in strengthening the partnerships that enable us to deliver long-term value to the nation.

Thank you.