Petronas to spend US$$4 bln over next 5 years mostly towards Rapid development in Johor

03-Mar-16

Petronas Chemicals Bhd, a unit of Malaysia’s state energy company, will spend US$$4 bln (RM16.63 bln) over the next five years to mostly invest in a refinery and petrochemicals complex also known as Rapid spearheaded by its parent in Johor, as per thestar.com.my The company predicts a “tougher” 2016 because of a plunge in crude and an oversupply that’s pushed down product prices, chief executive officer Sazali Hamzah said in an interview via e-mail. Petronas Chemicals typically benefits from higher oil which drives up petrochemical-product prices. The industry’s outlook this year was clouded by volatility in the oil market and slower Chinese demand. “Many companies will tend to back off from capital investments, stopping or shelving some of their projects,” Sazali said. “With our strong cash position, we have the advantage of funding our existing projects and growth projects as well.” Petroliam Nasional Bhd (Petronas) is proceeding with the US$27 bln integrated refinery and petrochemicals complex even as it defers some other projects. Petronas plans to lower capital and operating expenditure by as much as RM20 bln last year. It joins global peers such as Royal Dutch Shell Plc in cutting spending as the industry contends with the worst crude downturn in a generation.