At the first-half results briefing by Petronas last month, president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin, above, said Petronas is building on its downstream portfolio to “future-proof” the national oil company
While equity analysts remain bearish on the oil and gas (O&G) sector, they are more upbeat about the prospects of downstream companies.
One reason is that the plunge in crude oil prices benefit downstream players as it lowers the cost of their raw materials.
Secondly, while crude oil prices remain at low levels, it has been more stable over the last six to seven months.
This, in turn, could nudge oil majors such as Petroliam Nasional Bhd (Petronas) to embark on new projects.
And going by recent statements by Petronas, it is clear the national oil company is focused on completing its Refinery and Petrochemical Integrated Development (Rapid), which is touted to be Asia’s largest downstream hub.
“We expect the downstream sector to continue to grow along with Petronas’ capital expenditure plan,” said an analyst.
At the first-half results briefing by Petronas last month, president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin (pic) said Petronas is building on its downstream portfolio to “future-proof” the national oil company.
MIDF Research said it is maintaining its “negative stance” on upstream O&G but reiterated its “positive stance on the downstream sector on the back of Petronas’ capex focus.
“We opine that the downstream utility and retail fuel segment will continue to register commendable year-on-year earnings growth,
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