Petronas Reviews Operational and Cost Efficiencies Amid Low Oil Price Environment

Petronas is reviewing operational and cost efficiencies due to the low oil price environment, with prices hovering at around $64-$65 per barrel. The national oil company is assessing the need to bring in partners to reduce risk exposure for assets that require high capital investments but deliver limited value. Petronas conducts portfolio reviews to ensure its assets remain competitive, with each asset having to meet specific standards such as a break-even price of $50 per barrel or less and unit production costs below $6 per unit.

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas), Malaysia's national oil company, is taking proactive measures to navigate the challenging low oil price environment. With oil prices hovering around US$64 to US$65 per barrel, Petronas is reviewing its operational and cost efficiencies to ensure competitiveness in the future [1].

Mohd Jukris Abdul Wahab, executive vice president and CEO of Petronas' upstream business, emphasized the need to reassess how the company operates across various aspects, including maintenance, field operations, logistics management, and procurement. He noted that the current strategies, which have been in place for over 50 years, may no longer be sufficient to maintain competitiveness [1].

The company is also exploring partnerships to reduce risk exposure, particularly for high-capital investment assets that deliver limited value. Mohd Jukris highlighted that partnerships can bring not only capital but also new operating philosophies and standards, which are crucial in an industry where isolation is not an option [1].

Petronas conducts periodic portfolio reviews to ensure its assets remain competitive. Each asset must meet specific standards, such as a break-even price of US$50 per barrel or less and unit production costs below US$6 per unit. These reviews help guide the company in making strategic decisions about its assets [1].

In addition to its operational reviews, Petronas is also considering strategic stake sales. The company is reportedly in discussions with Bank of America Corp. to sell its 50% stake in the Brazilian oil field Tartaruga Verde for about $1 billion [2]. This move aims to optimize its portfolio and focus on more valuable assets.

The low oil price environment has also impacted global supply chains, including those affected by US tariffs. Mohd Jukris noted that the company must respond internally by driving cost efficiencies to mitigate the impact of these external factors [1].

While the low oil prices pose significant challenges, Petronas is positioning itself to adapt and thrive in the current market conditions. The company's strategic reviews and partnerships indicate a commitment to maintaining financial health and operational efficiency.

References:
[1] https://www.thestar.com.my/business/business-news/2025/08/11/petronas-reviewing-operational-cost-efficiencies-amid-low-oil-price-environment
[2] https://worldoil.com/news/2025/8/4/petronas-seeking-1-billion-for-brazil-oil-field-stake-sale-sources-say/