Integrated Report 2020
Integrated Report 2020
A progressive energy and solutions partner enriching lives for a sustainable future.
PETRONAS was able to turn in a commendable performance in financial year 2020 (FY2020), by swiftly implementing several tactical interventions across the Group, as well as taking several decisive and prudent measures.
Our mandate is to ensure that future generations inherit a strong and sustainable company. We have behind us 46 years of impressive growth that will drive us to take on the change and innovation that have become the business norms of today.
Tan Sri Ahmad Nizam Salleh
Chairman
Without question, my utmost gratitude is only rightly reserved for our diligent and dedicated employees whose resilience and commitment to excellence saw us through a very challenging time. I am confident we will be able to tackle all imminent challenges and capitalise on all opportunities that the future may bring.
Tengku Muhammad Taufik
President and Group Chief Executive Officer
Our passion for progress, drives us to create better solutions that benefit people, our partners and the planet. Each dot we connect brings us one step closer to our goal of achieving net zero carbon emissions by 2050 (NZCE 2050) and create a more sustainable future for all.
We focused on maintaining disciplined capital and operational spending as well as preserving liquidity, to ensure the resiliency and sustainability of our businesses.
PETRONAS’ Upstream business is a fully integrated business consisting of Exploration, Development, Production and Malaysia Petroleum Management (MPM), covering a broad portfolio of resources and play types. PETRONAS’ Upstream presence extends across more than 20 countries globally, with 247 producing fields, 432 offshore platforms and 30 floating facilities. Upstream also promotes sustainable and orderly development of Malaysia’s petroleum resources through 96 active Petroleum Arrangement Contracts (PAC), including within the Malaysia-Thailand Joint Development Area and is involved in 27 PACs internationally. The Upstream business continues to deliver results operationally through a combination of strategic and decisive measures. We shape and implement rigorous measures to reduce costs and maintain liquidity, while also strengthening our portfolio by encouraging more value-driven exploration and development of discovered resources to promote a vibrant oil and gas landscape.
PETRONAS’ Gas + New Energy (G+NE) business comprises the Liquefied Natural Gas (LNG), Gas and Power, New Energy and Hydrogen business segments. Operating in 12 countries with more than 4,000 employees globally, G+NE serves as PETRONAS’ one-stop centre for cleaner energy solutions. Its portfolio underscores our commitment to advance into the future as a cleaner energy solutions partner to support the global energy transition that has accelerated the shift of energy sources from fossil-based to lower carbon-based sources. We also aim to ensure long-term value creation and profitable growth for PETRONAS and its partners by focusing on customer-centricity, operational and commercial excellence, and sustainability, supported by the right talent, culture and digital innovations.
At G+NE, we continuously innovate to develop energy solutions to meet our customers’ energy demand. The “+” symbol in our name denotes the value we create from the innovative solutions we offer, that go beyond conventional energy solution. “+” also represents the new and future energy that is part of the suite of cleaner energy solutions we offer. All in all, the “+” underscores our desire to deliver above and beyond the convention, for the purpose of enriching lives for a sustainable future.
PETRONAS’ Downstream business plays a strategic role in enhancing the value of PETRONAS’ petroleum resources by transforming molecules into high-quality, value-added products for domestic and international markets. With more than 800 kilo barrels per day (kbpd) of refining capacity, Downstream’s full spectrum of activities include refining, trading and marketing of crude oil and petroleum products, as well as manufacturing and marketing of petrochemical products including olefins, polymers, fertilisers, methanols, other specialty chemicals and derivative products. With a drive for designing solutions from the customer lens, the Downstream business is committed to ensuring a seamless customer experience towards becoming the preferred solutions partner worldwide.
PETRONAS’ Project Delivery and Technology (PD&T) Division is responsible for servicing, safeguarding and shaping the Group’s growth and future positioning strategies with distinctive research and technical expertise, innovative solutions, as well as robust systems and processes. PD&T aims to innovate with pace and enable tech-digital transformation for PETRONAS, as well as leverage technology and digital synergy to achieve sustainable and regenerative development. Serving as the builder of the engines that drive groupwide growth for PETRONAS, PD&T is committed to maximising the value produced by the Group’s businesses with a strengthened digital landscape, harnessing data to deliver value through tech-digital products and solutions. PD&T’s role has become even more crucial in the face of unprecedented challenges moving forward PETRONAS steps out to pursue new areas of opportunity beyond oil and gas while meeting its NZCE 2050 aspiration.
We recognise that we have a responsibility to balance out our economic ambitions with positive social and environmental considerations. PETRONAS' Sustainability Agenda is the compass that guides us as we set out to deliver energy solutions that fuel progress in a responsible manner.
Continued Value Creation
Drive long-term business value creation through responsible investments.
Safeguard the Environment
Collaboratively reduce environmental impact by transitioning to lower carbon energy solutions and deploying innovative operations and technologies.
Positive Social Impact
Create positive alliances with the communities in which we operate by protecting and adding value to the well-being of employees, partners and society.
Responsible Governance
Safeguard the organisation's commitment through strong governance mechanisms and ethical business practices.
With this landmark move, PETRONAS became the first oil and gas company in Southeast Asia to adopt this goal. Our NZCE 2050 aspiration underscores our ambition to meet higher sustainability goals for the longer term that address stakeholder concerns and support the Paris Agreement.
aspiration is defined as
Balancing the remaining Scope 1 and Scope 2 GHG emissions from its assets under operational control with carbon offsets.
All in all, PETRONAS companies, operations, associations and staff globally banded together and contributed a total of RM50.6 million in cash and in kind to help flatten the curve of the pandemic worldwide.
Yayasan PETRONAS contributed RM21 million worth of medical equipment and supplies to Ministry of Health (MOH) and National Disaster Management Agency (NADMA) to help hospitals and healthcare frontliners mitigate the spread of the COVID-19 pandemic in Malaysia.
Yayasan PETRONAS contributed an additional RM2.5 million worth of medical equipment to the MOH and NADMA to combat the second wave of COVID-19 in the state of Sabah, Malaysia.
The PETRONAS Group, on behalf of the MOH, was able to procure and deliver medical equipment through a robust supply chain mechanism, in less than seven days to support COVID-19 patients dependent on ventilators at selected hospitals in Malaysia.
Upstream business operations commmitted some RM3.5 million to eight host countries comprising funds and aid for personal protective equipment (PPE) as well as medical equipment.
PETRONAS Lubricants International (PLI) converted its coolant production lines to manufacture ethanol-based sanitisers for hospitals and the local communities in Italy and Brazil.
Message from the Chairman
Dear Stakeholders,
The year in review was undoubtedly one of the most testing years for the oil and gas industry with the twin shocks of the COVID-19 pandemic and the oil prices free fall, plunging the industry to an unprecedented low. As lockdown measures were swiftly implemented to stem the tide of the pandemic, economies of the world over suffered with many coming to an abrupt standstill. At the same time, an oil price rout amidst a supply overhang wreaked further havoc on an already despondent industry. Like all oil majors, the PETRONAS Group felt the full brunt of this onslaught with a never before seen contraction in our revenue.
Message from the Chairman
Esteemed Stakeholders,
The year 2020 has been an exceedingly difficult one for the industry. The unprecedented events that unfolded saw the industry contending with the challenges of the COVID-19 pandemicinduced demand destruction and a fragile oil price, following a sustained rout due to prolonged supply glut. Within the broader energy space, the transformative experience of the pandemic tested the vulnerabilities in our current energy system. Since then, the push towards energy transition has become increasingly evident and accelerated. In totality, these developments have converged to become an undeniable imperative requiring immediate reforms along the whole value chain, forcing a Great Reset for the industry
Amidst these disruptions, our priority is to keep our people safe. We took immediate measures to ensure the safety of our 48,000 workforce, business continuity across more than 30 countries as well as the social wellbeing of communities in our areas of operation.
