Petronas AR05_review 7

CONCEPT . DESIGN BY CHIMERA SDN BHD
PETRONAS ANNUAL REPORT 2005
PETROLIAM NASIONAL BERHAD (PETRONAS) COMPANY NO. 20076-K REGISTERED OFFICE TOWER 1, PETRONAS TWIN TOWERS
KUALA LUMPUR CITY CENTRE, 50088 KUALA LUMPUR, MALAYSIA T +603 2051 5000 F +603 2026 5050 www.petronas.com.my
ANNUAL REPORT 2005
CONTENTS
01
Corporate Statements
02
Company Profile
04
In Remembrance of the late Chairman
08
Board of Directors
10
Management Committee
12
Five-Year Financial Highlights
18
The Year in Review
58
Main Events
Petronas AR05_review 7
7/9/05
4:36 PM
Page 1
C O R P O R AT E S TAT E M E N T S
M I S S I O N S TAT E M E N T
1
We are a business entity
C O R P O R AT E S TAT E M E N T S
Petroleum is our core business
Our primary responsibility is to develop and add value to
this national resource
Our objective is to contribute to the well being of the
people and the nation
V I S I O N S TAT E M E N T
To be a leading oil and gas multinational of choice
S H A R E D VA L U E S
Loyalty – Loyal to nation and corporation
Professionalism – Committed, innovative and proactive
and always striving for excellence
Integrity – Honest and upright
Cohesiveness – United in purpose and fellowship
Petronas AR05_review 7
7/9/05
4:36 PM
Page 2
C O M PA N Y P R O F I L E
2
PETRONAS, the acronym for Petroliam Nasional Berhad, is Malaysia’s national petroleum
corporation. Incorporated on 17 August 1974 under the Companies Act, 1965, it is wholly owned
by the Malaysian Government.The Petroleum Development Act, 1974 vests in PETRONAS the
entire ownership and control of the petroleum resources in Malaysia. PETRONAS is an integrated
international oil and gas company with business interests in more than 30 countries and four
subsidiaries listed on the Bursa Malaysia. It is ranked among the Fortune Global 500 largest
corporations in the world.
The Group is engaged in the exploration and production of oil and gas; oil refining; marketing and
distribution of petroleum products; trading; gas processing and liquefaction; gas transmission
pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and
marketing; shipping; and property investment.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 3
3
C O M PA N Y P R O F I L E
Petronas AR05_review 7
7/9/05
4:36 PM
Page 4
4
“He was a unique man and was ever-willing to give
everybody a chance.”
“Some men must be measured by the scale of their contribution,some by
the content of their character.Tan Sri Azizan must be measured by both.”
“His contributions to the country are priceless.”
Petronas AR05_review 7
7/9/05
4:36 PM
Page 5
I N R E M E M B R A N C E O F T H E L AT E C H A I R M A N
“A man like Azizan isn’t born every day.The hallmark of
Azizan’s character was absolute honesty and integrity.He was
the quintessential public servant of the highest rank.”
“He was loyal to his country, his career and the nation.”
T H E L AT E TA N S R I DAT O ’ S E R I A Z I Z A N Z A I N U L A B I D I N
On 14 July 2004, we mourned the loss of our Chairman, the late Tan Sri Dato' Seri Azizan Zainul Abidin. The late Tan Sri Azizan,
who joined PETRONAS as our second President and Chief Executive in 1988, was regarded as a far-sighted leader with a noble
vision – to see the national oil corporation of Malaysia become a major global player to be reckoned with.
It was during his tenure that PETRONAS underwent several major developments, one of the most notable being the corporation’s
embarkation on our globalisation journey in the early 1990s.
He was also instrumental in bringing about the rapid expansion and diversification of PETRONAS’ operations, as part of our
value adding business integration strategy.
On a personal level, the late Tan Sri Azizan was a gentleman who personified honesty, integrity and professionalism, the very
same values that he had in fact launched and introduced into the organisation as PETRONAS Shared Values. More than the
well-earned reputation as a distinguished corporate figure and nationalistic civil servant, the late Tan Sri was distinctively known
for his humility and soft-spoken ways.
Indeed, he was a source of inspiration for many, and his selfless contributions to both our corporation and country have become
a lasting legacy for generations to come.
5
I N R E M E M B R A N C E O F T H E L AT E C H A I R M A N
“Tan Sri Azizan had left behind legacies that we would
remember for a long time...his most significant legacy to
PETRONAS was its shared values.”
Petronas AR05_review 7
7/9/05
4:36 PM
Page 6
Our relationships with the
communities we serve are built on
trust.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 7
C U LT I V AT I N G R E L AT I O N S H I P S
Petronas AR05_review 7
7/9/05
4:36 PM
Page 8
BOARD OF DIRECTORS
Acting Chairman and President &
Chief Executive Officer
Members
Company Secretary
Tan Sri Dato’ Zaki Tun Azmi
Tan Sri Dato Sri Mohd Hassan
Marican
Dato’ Izzuddin Dali
Mohammed Azhar Osman
Khairuddin
Dato’ Seri Khalid Ramli
Raja Dato’ Zaharaton Raja Zainal
Abidin
Datuk Ishak Imam Abas
Datuk Anuar Ahmad
Nasarudin Md Idris
8
Petronas AR05_review 7
7/9/05
4:36 PM
Page 9
FROM LEFT
Nasarudin Md Idris
Datuk Anuar Ahmad
Dato’ Seri Khalid Ramli
Raja Dato’ Zaharaton Raja Zainal Abidin
Dato’ Izzuddin Dali
Tan Sri Dato Sri Mohd Hassan Marican
Tan Sri Dato’ Zaki Tun Azmi
Datuk Ishak Imam Abas
Mohammed Azhar Osman Khairuddin
9
BOARD OF DIREECTORS
Petronas AR05_review 7
7/9/05
4:36 PM
Page 10
MANAGEMENT COMMITTEE
10
Tan Sri Dato Sri Mohd Hassan
Marican
Acting Chairman, President & Chief
Executive Officer
Datuk Ishak Imam Abas
Senior Vice President
Abdullah Karim
Vice President, Exploration &
Production Business
Datuk Anuar Ahmad
Vice President, Oil Business
Datuk Abdul Rahim Hj Hashim
Vice President, Gas Business
Yeow Kian Chai
Vice President, Petrochemical
Business
Nasarudin Md Idris
Vice President, Corporate Planning &
Development Division
Datuk Ainon Marziah Wahi
Vice President, Human Resource
Management Division
George Ratilal
Vice President, Finance Division
Dr Rosti Saruwono
Vice President, Education Division
Dato’ Shamsul Azhar Abbas
President & Chief Executive Officer,
Malaysia International Shipping
Corporation Berhad
Mohamad Johari Dasri
Managing Director & Chief Executive
Officer, PETRONAS Carigali Sdn Bhd
Ahmad Nizam Salleh
Managing Director & Chief Executive
Officer, Malaysia LNG Sdn Bhd
Wan Zulkiflee Wan Ariffin
Managing Director & Chief Executive
Officer, PETRONAS Gas Berhad
Mohammed Azhar Osman
Khairuddin
Senior General Manager, Legal &
Corporate Affairs Division
Faridah Haris Hamid
Secretary
Petronas AR05_review 7
7/9/05
4:36 PM
Page 11
11
MANAGEMENT COMMITTEE
FROM LEFT
Wan Zulkiflee Wan Ariffin
Yeow Kian Chai
Dato’ Shamsul Azhar Abbas
Datuk Ainon Marziah Wahi
George Ratilal
Datuk Abdul Rahim Hj Hashim
Ahmad Nizam Salleh
Datuk Anuar Ahmad
Tan Sri Dato Sri Mohd Hassan Marican
Datuk Ishak Imam Abas
Nasarudin Md Idris
Abdullah Karim
Dr Rosti Saruwono
Mohamad Johari Dasri
Mohammed Azhar Osman Khairuddin
Faridah Haris Hamid
Petronas AR05_review 7
7/9/05
4:36 PM
Page 12
46
FIVE-YEAR FINANCIAL HIGHLIGHTS
13
7,0
REVENUE
G R O U P A S AT 3 1 M A R C H
(MILLION RM)
130,000
120,000
,51
2
110,000
97
100,000
,43
4
90,000
81
12
1
67
70,000
,18
73
,35
1
80,000
60,000
01
03
04
05
NET PROFIT
35
,55
6
58
,03
0
PROFIT BEFORE
TA X AT I O N
02
34,500
50,000
31,000
45,000
27,500
40,000
24,000
,65
23
37
,44
2
9
55,000
20,500
5
,10
15
8
,56
14
13,500
24
25,000
26
,31
8
,87
2
16
17,000
,48
29
30,000
8
,02
9
35,000
10,000
20,000
01
02
03
04
05
01
02
03
04
05
Petronas AR05_review 7
7/9/05
4:36 PM
Page 13
GROUP HIGHLIGHTS
Revenue (RM billion)
2005
2004
2003
2002
2001
137.0
97.5
81.4
67.2
73.4
Profit Before Tax (RM billion)
58.0
37.4
26.9
24.3
29.0
EBITDA (RM billion)
68.1
47.8
36.0
32.2
36.2
Net Profit (RM billion)
35.6
23.7
15.1
14.6
16.5
Total Assets (RM billion)
239.1
203.2
178.0
144.2
139.0
Shareholders’ Funds (RM billion)
129.4
102.7
83.5
68.9
58.0
Cash & Fund Investment Balance (RM billion)
75.2
53.8
55.4
42.8
44.3
Total Borrowings (RM billion)
52.8
57.7
58.1
40.4
40.6
42.3%
38.4%
33.0%
36.2%
39.6%
24.3%
18.4%
15.1%
16.9%
20.9%
Return on Capital Employed
28.7%
25.6%
27.5%
36.1%
0.22x
0.28x
0.33x
0.28x
0.29x
Reserves Replacement Ratio
0.7x
2.6x
2.1x
4.0x
2.0x
33,944
30,634
28,378
25,733
23,441
77
23
120,000
3,2
05
222,500
9,3
SHAREHOLDERS’
FUNDS
9,0
T O TA L A S S E T S
12
Number of Employees
83
37.4%
Total Debt / Total Assets Ratio
110,000
12
10
2,6
98
20
205,000
100,000
17
8,0
187,500
90,000
14
80,000
70,000
117,500
60,000
100,000
58
,03
4
135,000
68
,88
4
13
9,0
40
152,500
4,2
16
83
,45
6
170,000
50,000
01
02
03
04
05
01
02
03
04
05
13
FIVE-YEAR FINANCIAL HIGHLIGHTS
Return on Revenue
Return on Total Assets
Petronas AR05_review 7
7/11/05
11:51 AM
Page 14
FIVE-YEAR FINANCIAL HIGHLIGHTS
,91
8
REVENUE
56
C O M PA N Y A S AT 3 1 M A R C H
(MILLION RM)
54,500
51,000
43
,65
7
47,500
44,000
36
37,000
37
,96
5
14
,98
8
40,500
31
,96
3
33,500
30,000
01
03
04
05
NET PROFIT
29
19
,52
2
,79
2
PROFIT BEFORE
TA X AT I O N
02
19,100
27,000
17,800
25,000
16,500
15,200
8
14
,01
8
23,000
15
22
,93
,07
7
4
29,000
13,900
,99
12,600
11,300
10
,47
3
16
17,000
11
,32
2
,24
4
17
19,000
2
20
,23
21,000
15,000
10,000
01
02
03
04
05
01
02
03
04
05
Petronas AR05_review 7
7/9/05
4:36 PM
Page 15
15
FIVE-YEAR FINANCIAL HIGHLIGHTS
SHAREHOLDERS’
FUNDS
12
82
9,1
,46
90
6
T O TA L A S S E T S
79,000
122,000
72,000
5,1
,80
0
65,000
61
11
2,0
115,000
11
09
77
71
,77
4
129,000
58,000
101,000
51,000
94,000
44,000
,23
86
84
87,000
,11
1
3
43
,71
4
50
,83
5
108,000
37,000
80,000
30,000
01
02
03
04
05
01
02
03
04
05
Petronas AR05_review 7
7/9/05
4:36 PM
Page 16
Our most important asset is our people.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 17
N U R T U R I N G H U M A N C A P I TA L
Petronas AR05_review 7
7/9/05
4:36 PM
Page 18
THE YEAR IN REVIEW
18
Tan Sri Dato Sri Mohd Hassan Marican
Acting Chairman and President &
Chief Executive Officer
Petronas AR05_review 7
7/9/05
4:36 PM
Page 19
OVERVIEW
It takes team effort to build the foundation instrumental to the Group’s sustained growth and success. One man
nevertheless provided key contribution to the building of the foundation through his leadership, vision and
stewardship. We lost the visionary leader and an impeccable steward on 14 July 2004. Our beloved chairman Tan
Sri Dato’ Seri Azizan Zainul Abidin’s sudden and untimely demise is a great loss to this organisation and to the
nation. On behalf of PETRONAS, I would like to pay tribute to our late Chairman, for his invaluable contributions and
sacrifices. While we mourn his passing, his legacy will continue to live as we continue to move forward. May Allah
bless his soul.
The year under review proved to be a good year for the integrated oil and gas companies on the back of a sustained period of
strong crude oil prices as the world continued to be subjected to uncertainties and volatility which affected global oil demand and
supply. Sustained global economic growth driven by China and the United States contributed to the upward pressure on oil
demand. On the other hand, continued volatility in the Middle East, concerns over supply disruptions in Nigeria, Venezuela and
Norway, weather disruptions brought about by Hurricane Ivan and uncertainties in Russia heightened concerns over security of
supply. Higher demand and threat of supply disruptions, coupled with increased speculative oil trading and stock building
activities provided the impetus for oil prices to remain high throughout the year.
The average price of West Texas Intermediate (WTI) and Brent crudes increased by about 40% during the review period to
USD45.05 and USD42.10 per barrel respectively. The weighted average price of Malaysian Crude Oil (MCO) rose in tandem to
USD45.00 per barrel from USD30.90 per barrel in the previous financial year, an increase of 45.6%.
The successful implementation of operational efficiency and reliability initiatives enabled the Group to capitalise on the favourable
market environment during the financial year, and to optimise the synergistic benefits of its fully integrated business. The
operational improvement efforts, anchored around the Group’s integration, value adding and globalisation strategy, resulted in
sustained growth and a record-breaking best ever performance for the Group.
19
THE YEAR IN REVIEW
Building on the sound foundation anchored on our integration, value adding and globalisation strategy, PETRONAS
turned in an outstanding performance for the financial year ended 31 March 2005. The strongest ever performance
was a fitting gift for PETRONAS’ 30-year Anniversary and placed the Group on a firmer footing to successfully
compete in the increasingly challenging, complex and volatile global oil and gas industry. The successful
implementation of operational efficiency and reliability initiatives enabled the Group to capitalise on the favourable
market environment during the review period, and to optimise the synergistic benefits of its fully integrated business
to deliver remarkable results. Revenue surpassed the RM100 billion mark to a staggering RM137.5 billion. Profit
before tax rose by 55% to a record RM58.0 billion, notably higher than the average increase in WTI and Brent crude
oil prices during the period under review. The Group’s Return on Average Capital Employed stood at a commanding
37.4%, a testimony to the Group’s ability to efficiently generate returns and profits on par if not better than the more
established major players in the industry.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 20
GROUP FINANCIAL REVIEW
HIGHLIGHTS
• Profit before tax rose by 55% and net profit rose by
50% to RM58.0 billion and RM35.6 billion respectively.
Operational efficiency across all business sectors
successfully contained costs and improved margins.
• Over 40% increase in revenue to RM137.0 billion
from RM97.5 billion in the previous year, with higher
realised prices and higher sales volume achieved.
Nearly 80% of revenue was generated outside
Malaysia. This comprised revenue from international
operations and exports from Malaysia.
• Stronger balance sheet with total assets increasing
to RM239.1 billion.
Exports accounted for over 40% or RM57.5 billion
of revenue, representing nearly 12% of Malaysian
exports over the same period.
• Net cash position of RM22.4 billion with higher cash
and fund investment balance compared to total
borrowings.
Manufacturing activities contributed 57% or
RM78.2 billion of revenue as the Group continued to
create and add value to its oil and gas resources.
• Improved Return on Revenue and Return on Total
Assets at 42.3% and 24.3% respectively, on par or
exceeding industry average.
20
PRODUCT SALES AT A GLANCE – BY VOLUME 5-YEAR TREND
2005
2004
2003
2002
2001
Crude Oil (‘000 barrels)
207,089
194,203
181,540
164,545
162,349
Natural Gas (‘000 mmbtu)
212,840
164,247
126,749
90,489
57,713
Processed Gas (‘000 mmbtu)
622,000
560,789
587,117
553,686
603,802
22.4
18.4
15.2
15.3
15.2
LNG (million MT)
Petroleum Products (‘000 barrels)
218,472
225,403
200,285
186,475
164,592
LPG (million MT)
2.6
2.3
2.3
2.2
2.0
Petrochemicals (million MT)
6.4
7.3
5.5
4.0
3.2
Record earnings and profits, driven both by prices and
volume increases
The Group turned in a record revenue of RM137.0 billion, a
40.5% increase compared to RM97.5 billion registered last
year. While higher prices were a factor, the Group also realised
higher sales volume of between 10% and 30% for nearly all
business sectors.
The Group continued to reap increasing benefit from its
globalisation strategy as reflected in significant revenue
contribution from its international business. International
business revenue, which comprises revenue from international
operations and exports from Malaysia, grew by RM30.1 billion
to RM106.0 billion, accounting for 77.3% of Group revenue.
Export revenue amounted to RM57.5 billion, representing
about 12% of Malaysia’s exports over the same period,
earning valuable foreign exchange revenue for the nation, while
at the same time, providing positive contribution towards the
country’s balance of payment.
Revenue from the Group’s manufacturing activities, comprising
the manufacture of petroleum products, liquefied natural gas,
processed gas and petrochemicals, have increased from
RM57.5 billion to RM78.2 billion this year. The Group remains
focused on value-adding activities to maximise the value of its
oil and gas resources.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 21
21
THE YEAR IN REVIEW
Strengthening business integration has
enabled PETRONAS to sustain growth in
the face of increasing global challenges.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 22
GROUP FINANCIAL REVIEW
Remarkably, the Group’s profit before tax and net profit have
increased by 55.0% and 50.3% respectively, substantially
higher compared to the growth in revenue. Profit before tax
amounted to RM58.0 billion, up by RM20.6 billion from the last
financial year and profit after tax and minority interests was
RM35.6 billion, an increase of RM11.9 billion. Operational
efficiency achieved across all business sectors has enabled
the Group to realise cost savings and enhance profitability. This
efficiency was further reflected in the higher Return on
Revenue (profit before tax over revenue) this year that rose to
42.3% compared to 38.4% last year.
22
Strong growth in asset base and shareholders’ funds,
with enhanced liquidity
The Group’s balance sheet continued to strengthen. Total
assets grew to RM239.1 billion, up 17.7% from RM203.2
billion last year. Shareholders’ funds also increased to
RM129.4 billion from RM102.7 billion last year, a
commendable achievement for a company that started with
RM10 million in equity 30 years ago.
Return on Total Assets (profit before tax over total assets) rose
to 24.3% compared to 18.4% in the previous financial year,
while Return on Average Capital Employed (ROACE) improved
to 37.4% compared to 28.7% in the previous year, underlining
the Group’s ability to efficiently generate returns and profits, on
par, if not better, than other comparable integrated oil and gas
companies.
The Group generated strong cashflow from operations this
year. Notably, cash generated from operations during the year
was more than sufficient to cover the Group’s investing and
financing requirements. With the surplus, the Group’s cash and
fund investment balance as at 31 March 2005 rose to RM75.2
billion, a substantial increase from RM53.8 billion in 2004.
Cash-wise, the Group has nearly doubled the amount required
to meet all of its obligations due within the next twelve months.
This places the Group in a highly liquid and cash rich position,
able to fund its future operational cash needs and more
importantly enables the Group to quickly capitalise on sound
and strategic business opportunities that may arise.
In comparison, total borrowings was reduced to RM52.9 billion
as at 31 March 2005 compared to RM57.7 billion a year ago,
following scheduled payments of Notes and Term Loans made
throughout the year. Correspondingly, the Group’s financial
leverage position has improved with total debt to total asset
ratio reduced to 0.22 times compared to 0.28 times last year.
This is well below our target of 0.30 times. With cash and fund
investments surpassing total borrowings, the Group is in a net
cash position of RM22.4 billion.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 23
PETRONAS remains focused on
value-adding activities to optimise its
oil and gas resources.
23
THE YEAR IN REVIEW
Petronas AR05_review 7
24
7/9/05
4:36 PM
Page 24
The Group’s exploration and production
capabilities are continuously enhanced
to realise our aspiration to be a leading
global player.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 25
E X P L O R AT I O N A N D P RO D U C T I O N B U S I N E S S
HIGHLIGHTS
• Strong total reserves at 25,413 million boe, with new
discoveries of 1,132 million boe. International reserves
account for 23.3%.
• Robust upstream capital expenditure amounting to
over 60% of total Group expenditure. Spending was
driven mainly by international development projects.
• Higher total production by 30.5 million boe due to
higher domestic gas production and increased
international oil production.
• Awarded five new domestic PSCs, bringing the
number of PSCs to 53, the highest ever.
• Internationally, secured five new PSCs, bringing the
number of ventures to 59 in 26 countries.
• Sustained Reserve Replacement Ratio of 0.7 times,
within range of industry average and continuing positive
trend of successfully replenishing reserves produced.
25
2005
2004
2003
2002
2001
25,413
25,633
24,140
22,529
21,493
New Discoveries (million boe)
1,132
1,191
1,181
515
680
Total Production (million boe)
583.3
552.8
486.8
417.8
424.5
Crude Oil and Condensate (million boe)
275.9
267.4
237.8
219.2
224.8
Natural Gas (million boe)
307.4
285.4
249.0
198.6
199.7
Reserve Replacement Ratio
0.7x
2.6x
2.1x
4.0x
2.0x
Capital Expenditure (RM billion)
10.7
13.7
7.8
6.0
4.3
Total Reserves (million boe)
Our exploration and production (E&P) activity is driven by the
need to augment Malaysia’s reserves and ensure growth in line
with the Group’s strategy of integration, adding value and
globalisation. The domestic upstream sector saw intensified
efforts to enhance the nation’s reserves while meeting
production targets to cope with higher demand. On the
international front, the Group continued to consolidate its
portfolio with emphasis on development projects this year. The
Group remained focused on strategic growth in South East
Asia and select opportunities in Africa, the Middle East and the
Caspian region. We continued to enhance our E&P capabilities,
emphasising on technology and development of human capital
in line with our aspiration to be a leading global E&P player.
TOTAL PRODUCTION
In ‘000 boe per day
Domestic Exploration and Production
Sustaining the nation’s reserves and production
As at 1 January 2005, Malaysia’s total reserves stood at 19.49
billion barrels of oil equivalent (boe) compared to 19.35 billion
boe in the preceding year. Our continuous efforts to replenish
the nation’s hydrocarbon resources have resulted in a fairly
constant reserve life for Malaysia – an average of 19 years and
33 years for crude oil and natural gas reserves respectively, at
current rate of production.
Crude oil and condensate reserves rose from 4.84 billion
barrels to 5.29 billion barrels. Higher gas production during the
year led to a marginal decline in gas reserves from 87.02 trillion
standard cubic feet (tscf) to 85.20 tscf. Natural gas, however,
still constituted about 73% of Malaysia’s total reserves.
Malaysia produced a total of 617.1 million boe of crude oil and
natural gas during the year. PETRONAS’ share of this
production was 71.7% or 442.7 million boe, up from 426.9
million boe last year. Natural gas production, in particular, rose
during the year as a result of greater demand for processed
gas especially from the power sector and higher feedstock
requirement for our downstream LNG and petrochemical
plants.
Financial Year Ended 31 March
* CAGR: Cumulative Annual Growth Rate
THE YEAR IN REVIEW
EXPLORATION AND PRODUCTION BUSINESS AT A GLANCE
Petronas AR05_review 7
7/9/05
4:36 PM
Page 26
The year under review saw a significant increase of activities in
Malaysia’s exploration & production (E&P) sector. While
existing acreages continued to offer good prospects to
investors, the deepwater and ultra-deepwater areas have
created a new era in the E&P sector of the country. Five new
Production Sharing Contracts (PSCs) were signed during the
year, bringing the total number of PSCs to 53, the highest ever.
Two of the PSCs were for ultra-deepwater blocks covering
water depths of up to 4,000 metres.
26
Approximately RM12 billion was spent in the Malaysian E&P
sector last year, nearly half of which was in the form of foreign
direct investment (FDI) brought in by our PSC partners. The
vibrancy of Malaysia’s E&P sector has benefited not only oil
and gas players but has also generated valuable economic
activity for the country’s oil and gas support industries. This
has enabled these companies to build their capacity and
capability in this specialised sector and contribute towards
establishing Malaysia as a key oil and gas player in the region.
A total of 47 exploration wells, including 11 deepwater wells,
were drilled during the year with some 17,623 line kilometres of
2D and 15,221 square kilometres of 3D seismic data acquired.
The intensified exploration activity has resulted in the discovery
of 1,084.7 million boe of oil and natural gas reserves. Notably,
deepwater discoveries accounted for nearly 70% of reserve
additions during the year.
Significant oil and natural gas discoveries were made in the
deepwater Gumusut-Kakap and Malikai fields offshore Sabah;
NC4 and F2 Attic fields offshore Sarawak, and Anding Utara
oilfield offshore Peninsular Malaysia. The Anding Utara
discovery introduces further exploration prospects for the
Malay basin, previously regarded as a mature area.
Four new oil and gas fields came onstream during the year,
bringing the number of Malaysia’s producing fields to 75, of
which 53 are oil fields and 22 are gas fields. Nearly half of the
fields are operated by our E&P arm, PETRONAS Carigali Sdn
Bhd. Notably, two of the new fields that came onstream
marked the success of our small field development efforts, a
niche area identified as a means to sustain the nation’s oil and
gas production.
A significant milestone was achieved in Malaysian E&P activity
during the year when PETRONAS Carigali successfully drilled
the ‘longest’ development well ever at the Angsi oil and gas
field offshore Peninsular Malaysia. In August 2004, an 80degree extended reach drilling (ERD) well, Angsi A-28ST-1,
successfully penetrated an oil reservoir nearly six kilometres
away from the Angsi platform. The ERD has enabled the
recovery of oil and gas located a distance away from the
existing platform without having to install another structure,
thus significantly reducing costs.
To further enhance our E&P capabilities, we have set up a
state-of-the-art immersive visualisation centre, the first of its
kind in the region. Known as PETRONAS Visualisation Centre
(PviC), the centre enhances our ability to interpret and evaluate
upstream data. This puts us in the league of the larger oil and
gas companies that are already leveraging on this technology
in their E&P activities.
MALAYSIA’S RESERVES
In million boe
As at 1 January
DOMESTIC PRODUCTION
In ‘000 boe per day
We continue to chart progress with our Enhanced Oil Recovery
(EOR) effort, another initiative to sustain the nation’s oil and gas
production. The Water Alternating Gas (WAG) Method in the
Dulang Field, one of our ongoing EOR projects, is close to fullfield implementation.
Financial Year Ended 31 March
Petronas AR05_review 7
7/9/05
4:36 PM
Page 27
27
THE YEAR IN REVIEW
Continuous efforts are made to replenish
the nation’s hydrocarbon resources to
sustain Malaysia’s reserves and
production.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 28
International Exploration and Production
Consolidating our portfolio, with particular focus on
development activity
Total international reserves as at 1 January 2005 amounted to
5.93 billion boe, representing nearly a quarter of the Group’s
total reserves. A significant portion of our reserves are located
in Egypt, Sudan, Turkmenistan, Chad and the MalaysiaThailand Joint Development Area (JDA).
28
PETRONAS’ international production rose to 140.6 million boe
from 125.9 million boe last year, an increase of 11.8%.
Production from our Chad operations doubled during the year
with full production from the existing Doba fields following the
completion of upstream facilities. We also achieved higher
production from our Sudan, Indonesia and Myanmar
operations.
PETRONAS together with PTT Exploration and Production
Public Company Limited was awarded the PSC and joint
operatorship for JDA Block B-17-01 by the Malaysia-Thailand
Joint Authority during the year. Meanwhile, Block A-18 in the
JDA commenced production with 117 million standard cubic
feet per day (mmscfd) of natural gas flowing into the Trans
Thailand-Malaysia gas pipeline.
The Group made a return into the Philippines upstream sector
when it was awarded a Service Contract together with the
Philippines National Oil Company for the Mindoro Block,
offshore Philippines in January 2005.
INTERNATIONAL RESERVES
In million boe
The Group expended about RM7.5 billion in international E&P
activity during the review period. A significant portion of this
was spent on development projects, particularly in Sudan and
Egypt.
In Sudan, the development of Blocks 3 and 7 is on track with
first production expected later this year. Further development
works are being undertaken in the already producing Blocks 1,
2 and 4.
In Egypt, we have embarked on an extensive development
phase in our already producing West Delta Deep Marine Block
to supply gas to our Egyptian LNG project, which will be fully
onstream later this year.
As at 1 January
INTERNATIONAL PRODUCTION
In ‘000 boe per day
Five new ventures were acquired during the financial year,
bringing our international E&P portfolio to 59 ventures in 26
countries. We are the operator for 29 of the ventures, joint
operator for seven and active partner in the remaining 23
ventures.
In Indonesia, PETRONAS was awarded the PSC for the North
East Madura Offshore Block IV and acquired interest in two
development blocks, namely Madura and Muriah. Long term
Gas Sales Agreements have been finalised for both blocks.
These new blocks brought the total number of our ventures in
Indonesia to nine, enhancing our presence in that country.
Financial Year Ended 31 March
Petronas AR05_review 7
7/9/05
4:36 PM
Page 29
29
THE YEAR IN REVIEW
Intensified upstream development
activities overseas led to increasing
share of PETRONAS’ international oil and
gas production.
Petronas AR05_review 7
30
7/9/05
4:36 PM
Page 30
Expansion of PETRONAS’ downstream
operations created greater value for the
Group.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 31
OIL BUSINESS
HIGHLIGHTS
• Acquired Kuwait Petroleum International Limited
retail network and lubricant business in Thailand,
expanding the Group’s presence in the regional petroleum
products retail market.
• Total sales volume increased by 6.6% at 207.1 million
barrels.
• Expanded MCO export market beyond Asia to 26.5%
from 17.0% during previous year.
• Expanded lubricants market to China, Switzerland and
Liechtenstein.
• Excellent operational efficiency of Group’s refineries
resulted in overall refinery utilisation rate exceeding total
nameplate capacities and higher refining margins.
• Retained market leadership in Malaysia and South
Africa with overall market share of 40.0% and 24.8%
respectively.
31
2005
2004
2003
2002
2001
131.1
130.5
121.1
109.5
116.5
123.7
125.7
112.1
102.7
111.3
Foreign Equity Crude
46.3
35.6
31.7
29.8
25.1
Crude Oil Trading
29.7
28.1
24.7
25.3
20.8
218.5
225.4
200.3
186.5
164.6
2.6
2.3
2.3
2.2
2.0
MCO
45.00
30.90
28.60
23.24
29.86
Nile Blend
38.93
28.03
25.93
20.12
25.88
356,500
356,500
340,500
340,500
340,500
Volume Sold (million barrels, except LPG in
million tonnes)
Malaysian Crude Oil (MCO)
of which, exports
Petroleum Products
Liquefied Petroleum Gas (LPG)
Realised Crude Prices (USD / barrel)
Net Refining Capacity (barrels per day)
The Oil Business Sector continues to realise and add value to
the Group’s crude oil resources through its marketing, trading,
refining and retailing activities. Capitalising on higher crude oil
and petroleum product prices, the sector optimised output
from the Group’s upstream business and stepped up its
refining and retail operations to turn in a solid performance for
the year. Commendably, most of our refineries operated
reliably above nameplate capacity. The year also saw us
expanding our reach in the global market, diversifying our
crude export destinations and entering new international
markets in the retail and marketing business.
Crude Oil Marketing and Trading
Realising the value of our exploration and production
activities
During the year, the Oil Business Sector successfully marketed
and traded 207.1 million barrels of crude oil. This comprised
131.1 million barrels of MCO, 46.3 million barrels of the
Group’s Foreign Equity Crude (FEC) and 29.7 million barrels
of trading volume.
THE YEAR IN REVIEW
OIL BUSINESS AT A GLANCE
Petronas AR05_review 7
7/9/05
4:36 PM
Page 32
PETRONAS exported 123.7 million barrels or 57% of its share
of MCO, processed about 84.3 million barrels at the Group’s
refineries in Melaka and Terengganu and supplied the balance
to other domestic refineries. Whilst Asia remained the key
export destination, we have successfully expanded and
diversified our MCO markets, disposing a larger proportion, or
26.5%, beyond Asia (Australia 20.4%, USA 5.2%, New
Zealand 0.4% and Chile 0.5%) compared to 17% previously.
In line with higher global crude oil prices, the Group was able
to realise a higher average price of MCO at USD45.00 per
barrel compared to USD30.90 per barrel last year.
32
The Group also achieved higher sales volume for FEC oil. FEC
sales volume rose by 30% from 35.6 million barrels last year to
46.3 million barrels. This is attributed to the first full-year
production of our operations in Chad. PETRONAS’ operations
in Chad produces the Doba Blend crude, which has joined the
growing portfolio of PETRONAS FECs successfully marketed
and traded in the world oil market.
Refining
Operational excellence to capitalise on favourable
margins
Supported by strong demand for transportation fuel
worldwide, petroleum product prices continued on an upward
trend during the year. This has translated into high refining
margins for the Group’s refineries. The Group has successfully
capitalised on this high price environment, as we were able to
operate our refineries at high utilisation rates without
compromising safety and reliability.
Most of our refineries operated above their nameplate
capacities. The Group’s share of production from our refineries
in Malaysia and South Africa was 369,000 barrels per day,
higher than our net refining capacity of 356,500 barrels per
day.
Our refineries continued to play a key role within the Group’s
integrated business structure. All our refineries successfully
generated higher refining margins, led by the PSR-2 refinery in
Melaka. PSR-2 processes relatively heavier and sour crude to
produce a wide range of high-priced petroleum products.
Refined petroleum products remained the largest contributor
to the Group’s revenue.
Downstream Retail and Marketing
Market leadership at home and in South Africa,
continued expansion abroad
In the domestic retail and marketing sector, subsidiary
PETRONAS Dagangan Berhad (PDB) strengthened its
leadership position with a 40% market share and expanded its
retail network to 729 service stations. PDB sold a total 73.2
million barrels of petroleum products, LPG and lubricants,
higher than last year's sales volume of 68.9 million barrels.
Our South African subsidiary Engen Limited continued to retain
its leadership position in South Africa with a 24.8% market
share. During the year, we signed a definitive agreement with
Sasol Limited and two South African Black Empowerment
Consortia to merge Sasol's Liquid Fuels Business and Engen
Limited and its subsidiaries in a new liquid fuels joint venture.
The proposed merger has been approved by the European
Union Commission and is awaiting final approval from the
South African Competition Tribunal.
The Group’s Oil Business Sector made further progress in the
international front during the year. In Sudan, PETRONAS’ retail
business achieved high sales growth, where petroleum
products sales volume increased by 26.5% from 1.7 million
barrels to 2.2 million barrels. A new subsidiary was launched in
June 2004 to spearhead the Group’s lubricants and petroleum
products marketing in China. An encouraging growth was also
made in the Indonesian lubricant market with sales volume
close to 14,000 barrels.
The year also saw PETRONAS’ entry into the lubricant markets
in Switzerland and Liechtenstein. Through an agreement with
Switzerland-based Bucher AG (also known as Motorex),
PETRONAS Syntium premium grade lubricants, including the
synthetic Syntium 5000 FS, Syntium 3000S and Syntium
1000S, are now marketed in the two countries through
selected gas stations and Coop supermarket outlets,
Switzerland's second largest consumer products retailer.
In Thailand, the Group further expanded its presence in the
country’s retail and marketing sector through the acquisition of
Kuwait Petroleum (Thailand) Ltd’s entire network of 117 Q8
service stations and lubricant business from Kuwait Petroleum
International Limited during the year. These stations are
currently being re-branded and upgraded and are expected to
be completed by July 2005.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 33
33
THE YEAR IN REVIEW
PETRONAS continues to strengthen its
leadership position in the domestic
market while expanding its retail and
marketing business abroad.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 34
GAS BUSINESS
HIGHLIGHTS
• Over 20% increase in LNG volume sold at 22.4 million
MT due to full operation of MLNG Tiga and higher
contribution from spot LNG trading.
• Made major breakthrough into British gas market
with the signing of Gas Sales Agreement with British Gas
Trading Ltd for supply of natural gas beginning 2008.
• Over 4.4% increase in gas supplied by the PGU
system on the back of higher demand from the power
sector.
• Operational improvements by LNG and Gas
Processing Plants with higher utilisation and reliability
rates.
• Egytian LNG project coming onstream six months
ahead of schedule, heralding the Group’s first LNG
production outside Malaysia and will further increase the
Group’s total LNG production capacity.
34
GAS BUSINESS AT A GLANCE
2005
2004
2003
2002
2001
Production Capacity (million MT per annum)
22.7
22.7
15.9
15.9
15.9
Production Volume (million MT)
21.2
18.4
15.2
15.3
15.2
1.2
-
-
-
-
22.4
18.4
15.2
15.3
15.2
Realised LNG Price (USD / MT)
256.07
240.72
225.45
219.89
248.62
Average Plant Utilisation Rate
95.3%
91.8%
93.5%
94.1%
94.8%
Average Plant Reliability Rate
97.9%
95.6%
98.5%
97.9%
96.2%
1,869
1,789
1,849
1,731
1,672
Processed Gas
92.3%
83.3%
89.9%
85.2%
79.8%
Ethane
94.7%
76.3%
68.7%
48.4%
35.4%
Processed Gas
99.8%
98.7%
98.3%
98.7%
93.1%
Ethane
95.2%
91.4%
87.7%
85.7%
77.8%
LNG
Trading Volume (million MT)
Sales Volume (million MT)
Gas Processing and Transmission
Processed Gas Volume (mmscfd)
Gas Processing Plants Utilisation Rate
Gas Processing Plant Reliability Rate
PETRONAS Gas Business activities span the entire natural gas
chain. This includes gas processing, liquefaction, pipeline
transmission, marketing and trading of LNG, gas district
cooling and supply of industrial utilities. We are the world’s
largest LNG producer from a single location, the world’s largest
owner of LNG production capacity and have interests in more
than 10,000 km of natural gas pipelines worldwide. Our LNG
business is undergoing a period of transformation and growth.
The Group is strengthening its global presence through
international LNG projects and trading activities. Meanwhile,
the PGU system in Malaysia continues to support the nation’s
industrial activities, ensuring reliable supply of gas for power
generation.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 35
35
THE YEAR IN REVIEW
PETRONAS’ gas processing plant
complex – an integral part of the
Peninsular Gas Utilisation system
in Malaysia.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 36
LNG
36
Strengthening our position as a global integrated LNG
player
LNG production & export: LNG continues to be a focus
sector in the Group’s business expansion. The PETRONAS
LNG Complex in Bintulu, with a capacity of approximately 23
million tonnes per annum remains the world’s largest LNG
producer at a single location. A total of 21.2 million tonnes of
LNG was produced and exported from Bintulu during the year
compared to 18.4 million tonnes in the previous year. The
higher volume was due to MLNG Tiga’s first full-year of
operation as well as higher utilisation and reliability rates
recorded by all three LNG plants at the Complex during the
year.
Japan continues to be our largest LNG customer, taking up
61.0% of LNG exported, followed by South Korea with 22.9%,
Taiwan at 11.8% and the rest of the world at 4.3%.
PETRONAS continues to have significant market share in
Japan, South Korea and Taiwan amounting to 22%, 21% and
40% respectively.
The Group continues to build global reach in the LNG
business, beyond Asia Pacific. Our Egyptian LNG project is
progressing ahead of schedule. The first train with a capacity
of 3.6 million tonnes per annum (mmtpa) produced its first
cargo in May 2005, a good four months ahead of schedule.
With only six years between the first exploration well and the
first cargo, the project became one of the fastest LNG projects
ever executed. The second train also with 3.6 mmtpa capacity
is scheduled to produce its first cargo in September 2005,
seven months ahead of schedule. The entire output from Train
1 and Train 2 have been committed on long-term contracts
with Gaz de France and BG Gas Marketing respectively.
LNG trading: The year saw the Group establishing a firm
foothold in the emerging global LNG trading market. Our LNG
trading arm, Asean LNG Trading Company Ltd (ALTCO) sold
20 spot cargoes amounting to 1.2 million tonnes of LNG
during the year, compared to only one spot cargo in the
previous year. Eleven spot cargoes were delivered to
customers in the USA, six to South Korea and three to Spain.
LNG import terminal: The engineering, procurement and
construction contract for the Dragon LNG project in Milford
Haven, Wales was awarded in September 2004 and the
terminal is slated to be operational in the fourth quarter of
2007. PETRONAS has a 30% equity interest and 50%
capacity rights in Dragon LNG. The project completes the
Group’s fully integrated LNG business model with activities
spanning the whole spectrum of upstream feedstock supply,
liquefaction, trading, transportation right down to the receiving
and re-gasification terminal.
In August 2004, the Group made a major breakthrough into
the British gas market with the signing of a Gas Sales
Agreement with British Gas Trading Ltd, a subsidiary of
Centrica Plc to supply 2.2 mmtpa of natural gas for a period
of 15 years commencing in 2008. Under the agreement,
PETRONAS will supply LNG to the receiving terminal where
it will be re-gasified.
LNG SALES VOLUME
million
tonnes
Financial Year Ended 31 March
Petronas AR05_review 7
7/9/05
4:36 PM
Page 37
37
THE YEAR IN REVIEW
LNG continues to be a focus sector in
the Group’s global business expansion.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 38
Gas Processing and Transmission
Fuelling the nation’s power needs
The favourable expansion of the Malaysian economy during
the year led to higher demand for processed gas across the
power, industrial and petrochemical sectors. The escalation in
coal prices during the year, resulting in a switch from coal to
natural gas as a fuel source for power generation, also
contributed to higher demand from the power sector. To meet
the increased demand, additional supply had to be secured
from gas fields offshore Terengganu as well as through imports
from Vietnam, Indonesia and the Malaysia-Thailand JDA.
38
During the year in review, an average of 1,869 mmscfd of
processed gas was supplied by the Peninsular Gas Utilisation
(PGU) system compared to 1,789 mmscfd in the previous year,
a 4.5% increase. The power sector remained the largest gas
consumer accounting for 67.9% of total processed gas sold.
The Independent Power Producers (IPPs) consumed nearly
two-thirds of the total gas supplied to the power sector. The
remaining 32.1% was supplied to industrial and petrochemical
customers as well as exported to Singapore.
During the year, we managed to operate all our gas processing
plants above the design capacity to cater for the increase in
gas demand. We were also able to improve our plants’
reliability with a record achievement of 99.5%. The ability to
operate above design capacity at close to perfect reliability
levels speaks volumes of the integrity and high operational
standards of our plants.
Overseas, the Trans Thailand-Malaysia (TTM) project was
completed during the year under review. Malaysia’s share of
natural gas from the Malaysia-Thailand JDA entered the PGU
system in February 2005. The TTM pipeline is the latest
addition to the growing interconnection of cross-border gas
infrastructure in ASEAN and charts another important step
towards the realisation of the Trans-ASEAN Gas Pipeline
network.
Moving forward, the Group will continue to strengthen its
position as an integrated gas player in ASEAN, expand our
global LNG portfolio by capturing markets in the fast growing
Atlantic Basin and capture more value out of Malaysia’s gas
chain. With the ongoing efforts in Malaysia and abroad,
PETRONAS is poised to play a more significant role in the
global gas industry.
PROCESSED GAS VOLUME
mmscfd
1,869
1,849
1,731
Financial Year Ended 31 March
1,789
Petronas AR05_review 7
7/9/05
4:36 PM
Page 39
39
THE YEAR IN REVIEW
PETRONAS’ continuous drive for
operational excellence has led to further
improvement in its gas processing plant
reliability.
Petronas AR05_review 7
40
7/9/05
4:36 PM
Page 40
Improved plant integrity and efficiency
have translated into better performance
of our Petrochemical Business.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 41
P E T RO C H E M I C A L B U S I N E S S
HIGHLIGHTS
• Highest ever volume transacted with 6.4 million MT of
petrochemical products sold.
• Selective expansion into value-adding businesses
with plans for new melamine plant and new methanol
plant in Malaysia for the future.
• Improved operational integrity of petrochemical
plants reflected in higher plant reliability rates.
PETROCHEMICAL BUSINESS AT A GLANCE
2004
2003
2002
2001
7.8
8.3
7.6
6.4
4.3
Volume Sold (million tonnes)
6.4
6.1
5.5
4.0
3.2
Ethylene
842.27
459.27
363.38
342.31
479.25
Urea
201.82
155.88
122.50
112.08
125.75
Paraxylene
823.85
574.06
466.00
357.48
414.53
Methanol
251.66
231.60
173.01
127.58
166.35
Overall Plant Reliability Rate
90.2%
85.2%
88.0%
86.5%
83.9%
Overall Plant Utilisation Rate
77.4%
78.8%
76.0%
73.8%
67.2%
Main Petrochemical Product Prices (USD/MT)
The Group’s Petrochemical Business continued to reap the
benefits of integration on the back of the buoyant
petrochemical market with higher products prices. The ready
availability of gas-based feedstock from the PGU system
coupled with interdependency of feedstock supply between
our integrated plants have enabled our petrochemical
operations to realise significant operational synergy and
achieve cost advantage over naphta-based plants, translating
into higher margins. Combined with enhanced reliability and
utilisation rates achieved by most of our plants, our
Petrochemical Business successfully turned in an exceptional
year, making even greater contribution towards Group revenue
and profits. The sector’s strong performance this year lends
proof that our investments in petrochemical ventures had been
perfectly timed, allowing us to successfully ride the industry’s
cyclical nature.
Improved integrity and efficiency translated into better
overall performance
The Group (including its associates) produced a total of 7.8
million tonnes of petrochemical products during the year under
review, slightly lower compared to 8.3 million tonnes produced
in the previous year. The marginal production decline was due
to several scheduled plant shutdowns throughout the year to
cater for turnaround and revamp works. The Group remains
committed towards maintaining our world-scale petrochemical
plants at world-class standards, and these turnaround and
revamping activities are vital in order to ensure plant integrity
and efficiency. Some of the notable projects undertaken during
the year included the Revamp Project at ASEAN Bintulu
Fertilizer Sdn Bhd (ABF) and Phase One of the Plant
Rejuvenation Project at our methanol plant in Labuan.
41
THE YEAR IN REVIEW
2005
Production Volume (million tonnes)
Petronas AR05_review 7
7/9/05
4:36 PM
Page 42
Value-adding activities and further
diversification of PETRONAS’
Petrochemical Business have contributed
to Malaysia’s industrial development and
creation of employment opportunities for
the local community.
42
Petronas AR05_review 7
7/9/05
4:36 PM
Page 43
The Group’s strong emphasis on plant integrity and efficiency
has clearly yielded results, as seen by a significant
improvement in our plants' reliability. During the year, the
Group’s overall plant reliability rate rose from 85.2% to 90.2%,
enabling the petrochemical business sector to turn in a
significantly better overall performance on the back of higher
products prices.
In another significant development, PETRONAS during the
year embarked on the expansion of its methanol plant in
Labuan with a capacity of 1.7 million tonnes per annum,
scheduled to commence operations by the end of 2007. The
plant’s feedstock of about 150 mmscfd of gas will be supplied
from gas fields offshore Sabah. Methanol from the plant, will be
marketed to the growing domestic and regional markets.
PETRONAS’ Petrochemical Business has indeed played a
major role in Malaysia's industrial development. The approach
taken by PETRONAS to develop the petrochemical business in
an integrated manner to enhance synergistic benefits and
competitiveness by capitalising on the availability of natural gas
as feedstock, coupled with the combined advantages of
Malaysia’s strategic location and conducive environment has
been proven to be successful in attracting renowned joint
venture partners to set up world-scale plants involving sizeable
inflows of FDIs.
The firm foundation that has been established places the
Petrochemical Business in good stead to make an even
greater contribution to the Group.
43
THE YEAR IN REVIEW
The year also saw the Group’s Petrochemical Business
continuing to expand its value adding activities and strengthen
the integration of operations. In January 2005, subsidiary ABF
signed a Shareholders Agreement with Namhae Chemical
Corporation of Korea to set up a 50:50 joint venture to be
called ABF Namhae Melamine Sdn Bhd. The joint venture will
set up a 15,000 tonne per annum melamine production plant
in Bintulu, Sarawak, marking ABF’s maiden diversification into
further downstream, value adding products. The facility will be
Malaysia’s first melamine plant and is scheduled to be
completed and commissioned in early 2007. ABF will supply
urea as feedstock to the melamine plant and will operate the
plant on behalf of the joint venture company.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 44
LOGISTICS AND MARITIME BUSINESS
HIGHLIGHTS
• Building in-house capabilities through heavy
engineering activities, as we venture into deepwater
support services, LNG dry-docking and repair, and ship
conversion.
• Improved performance as a result of continued
energy fleet expansion and business rationalisation
efforts, strengthening our position as the world’s largest
owner/operator of LNG vessels and the world’s second
largest owner/operator of Aframax tankers.
• Creating value in offshore business to support growth
in exploration and production activities.
LOGISTICS & MARITIME BUSINESS AT A GLANCE
2005
2004
2003
2002
2001
LNG
18
17
15
13
13
Petroleum
51
46
16
17
14
Chemical
13
15
15
15
15
FPSO
1
1
-
-
-
Liner
20
27
27
27
27
Bulk
6
51
51
52
52
Total
109
157
124
124
121
44
Fleet Numbers (by Vessel Type)
The Logistics and Maritime Business continued to provide
valuable support and value-adding services to the Group with
its strong focus on energy transportation and logistics. The
sector registered excellent performance during the year under
review. Operating in a favourable market environment, our
strategy of carefully planned expansion and diversification into
related businesses has clearly paid off as the sector generated
record revenue and profits. With an enlarged LNG and
petroleum fleet and through ventures into offshore business
and heavy engineering, the sector is well poised to better
complement the Group’s business activities and at the same
time realise other business opportunities beyond the Group.
Striding ahead as a major player in the global energy
transportation business
The year under review proved to be a robust period for the
Group’s Logistics and Maritime Business. Demand for
maritime and logistic services grew during the year, spurred by
higher worldwide merchandise trade levels and strong global
economic growth. This higher demand, coupled with limited
supply of ships, resulted in stronger freight rates throughout
most shipping segments.
Against this favourable backdrop, the Group’s Logistics and
Maritime Business, spearheaded by subsidiary Malaysia
International Shipping Corporation (MISC) Berhad, achieved
yet another record year. MISC was able to capitalise on the
bullish environment through its continued business expansion
and rationalisation initiatives, higher operational efficiency,
improved cost management and timely execution of wellplanned strategies.
During the year under review, MISC expanded its fleet with the
addition of one LNG tanker, two Aframax tankers and three
Very Large Crude Carriers (VLCC). MISC’s fleet currently
stands at 109 vessels, with more than two thirds servicing the
core business area of energy transportation.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 45
45
THE YEAR IN REVIEW
The Group’s Logistics and Maritime
Business has been reinforced through
proactive growth strategies and timely
strategic rationalisation initiatives.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 46
MISC’s energy transportation business will be further
expanded with the delivery of an additional 11 LNG tankers,
two Aframax tankers and five VLCCs between 2005 and 2008.
These new vessels will not only reaffirm MISC as the world’s
largest owner and operator of LNG tankers and the world’s
second largest owner and operator of Aframax tankers, but will
also provide MISC with the critical mass it requires to better
serve its customers globally. The LNG fleet expansion, in
particular, will complement the Group’s LNG business growth
and at the same time allow MISC to capitalise on other
opportunities provided by the rapidly growing global LNG
market.
46
As part of its business rationalisation effort, MISC disposed off
54 vessels from various businesses during the year to
streamline its overall business.
The year also saw growth in MISC’s offshore business. Its first
Floating Production Storage and Offloading (FPSO) “Bunga
Kertas” delivered to PETRONAS Carigali in the last financial
year, received its first oil in April 2004. MISC also secured a
contract with Murphy Sabah Oil Co Ltd during the year to
provide and operate one FPSO for the Kikeh field. A contract
was also secured with Talisman Malaysia Ltd to provide and
operate a Floating Storage and Offloading (FSO) unit for the
South Angsi A oil field development. This involvement in
offshore business is timely, serving to support the highly active
Malaysian exploration and production sector. The conversion
and construction works for the FPSO and FSO will be
undertaken at MISC’s subsidiary, Malaysia Shipyard
Engineering Sdn Bhd (MSE).
MSE was re-named Malaysia Marine and Heavy Engineering
Sdn Bhd (MMHE) shortly after the end of the financial year.
MMHE will focus on the development of the Group’s technical
capabilities and technological base and help position Malaysia
as the region’s hub for deepwater support services and
maritime repairs.
During the year under review, MMHE completed a full scale
dry-docking and repair for the Group’s “Puteri Firus” and
“Puteri Delima” LNG vessels. The ability to perform LNG tanker
dry-docking in Malaysia will not only benefit the Group in terms
of time and cost savings but should also generate value
beyond the Group, given the fast increasing number of LNG
vessels worldwide.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 47
MISC continues to provide valuable
support and value adding services to the
PETRONAS Group through its energy
transportation and offshore businesses.
47
THE YEAR IN REVIEW
Petronas AR05_review 7
7/9/05
4:36 PM
Page 48
PETRONAS continues to harness
technology and develop capabilities to
deliver superior performing assets and
create competitive advantage for the
Group.
48
Petronas AR05_review 7
7/9/05
4:36 PM
Page 49
TECHNOLOGY DEVELOPMENT
HIGHLIGHTS
• Launched the PETRONAS Steady State Simulation
Software, a revolutionary engineering tool for process
design and plant optimisation.
• Successfully formulated the PETRONAS Sprinta 4T
5000, a fully synthetic four-stroke motorcycle engine oil for
the PETRONAS FP1 race bike.
Technology is a key success factor in the highly competitive oil
and gas industry. PETRONAS remains committed to
continuously improve the development and application of
technology to sustain and enhance its competitive position
and financial performance.
Our research and development (R&D) arm, PETRONAS
Research & Scientific Services Sdn Bhd (PRSS), continues to
serve the R&D and technological needs of the Group as well as
external parties, both in Malaysia and abroad.
Some of the significant successes achieved by PRSS during
the year include the development of a new method to identify
hydrocarbon prone zones in deepwater basins and the
development of a new product to treat solid deposit in wells.
Notably, PRSS has successfully designed and created a
revolutionary simulation software for process design and plant
optimisation. Another major achievement made by PRSS
during the year was the successful development of
PETRONAS Sprinta 4T 5000, a fully synthetic four-stroke
motorcycle engine oil. Formulated for the PETRONAS FP1
race bike, the product has been successfully tested in the
World Superbike Championship.
The year also saw PRSS providing technical consultancy
services beyond Malaysia, particularly in the E&P sector in
Vietnam, Iran, Sudan and Turkmenistan.
Technical Services
Our project management and engineering services subsidiary,
OGP Technical Services Sdn Bhd (OGP), continued to thrive
both at home and abroad. During the year, OGP successfully
completed 22 projects, including three international projects.
OGP’s major ongoing projects include the MG3 lube base oil
plant project for PETRONAS Penapisan Melaka Sdn Bhd and
Sudan’s Blocks 3 & 7 and 5A development projects for
Petrodar and White Nile Petroleum Operating Company
respectively. OGP has also formed a joint venture with Sudapet
Co Ltd to provide engineering and project management
consultancy services to further strengthen its presence in
Sudan.
THE YEAR IN REVIEW
Research and Development
49
Petronas AR05_review 7
50
7/9/05
4:36 PM
Page 50
PETRONAS is committed to inculcating
and maintaining HSE excellence.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 51
C O R P O R AT E S U S TA I N A B I L I T Y
In undertaking our business activities, we are always
conscious of the need to maintain the trust and confidence of
our stakeholders in order to ensure sustained growth and
success. We conduct our business in a consistent manner,
guided by the PETRONAS Guidelines for Business Conduct
and Corporate Sustainability Framework based on our Shared
Values and corporate mission.
Health, Safety and Environment
HIGHLIGHTS
• Various PETRONAS operating units and joint venture
companies won prestigious national and
international awards in recognition of their HSE
excellence.
• Led the implementation of a rig-to-reef project
offshore Sarawak, the first of its kind in Malaysia.
PETRONAS is committed to inculcating and maintaining a
work culture of HSE excellence. We adopt responsible HSE
management practices in every aspect of our operations by
implementing the HSE Management System group wide,
integrating business controls, quality and risk management
principles.
Execution of internal and external assurances, interventions
and continuous improvement activities have all helped uphold
our high HSE standards. During the year, we achieved an
industry-leading safety and health record and earned
commendable recognition. Our Group Lost Time Injury
Frequency per million man hours continued to reduce to 0.77
times for the year from 0.92 times previously, well within
industry standards and comparatively better than most
industry players.
During the year, PETRONAS Disaster Management Unit and
Corporate Security Division organised a national level
emergency and disaster exercise held at PETRONAS Carigali’s
facilities. The large-scale exercise, with included participation
from government authorities, allowed us to assess, enhance
and further improve our Emergency Response Plan.
We continue to contribute to the preservation and
conservation of the environment wherever we operate. During
the year, we handed over a decommissioned rig to Sarawak's
Marine Fisheries Department to be converted into an artificial
reef, marking the implementation of Malaysia’s first rig-to-reef
project. The project, jointly implemented with Sarawak Shell
Berhad, Sarawak's Marine Fisheries Department and the
Sarawak Tourism Board, will enhance the existing coral reefs
offshore Miri, preserving its natural beauty.
With the Kyoto Protocol in effect as of 16 February 2005, we
have set up a Greenhouse Gas (GHG) Inventory Working
Group to establish PETRONAS GHG’s inventory. The GHG
inventory will be included in Malaysia’s Second National
Communication report to the United Nations Framework
Convention on Climate Change. The inventory will also provide
a reference point for potential project development and
investment opportunities in the future.
51
THE YEAR IN REVIEW
Our Corporate Sustainability Framework covers seven key
result areas to facilitate effective and systematic
implementation, measurement and reporting of our triple
bottom-line performance. The triple bottom-line means
managing our petroleum resources responsibly by balancing
between commercial, environmental and social performance
under which the seven key result areas of our Corporate
Sustainability Framework are categorised. The seven key result
areas are: Shareholder Value; Energy Use; Health, Safety and
Environment; Product Stewardship; Societal Needs; Climate
Change; and Biodiversity.
The year also saw a number of our subsidiaries and joint
venture companies continue to be recognised with annual
national and international industry excellence awards. Both
PETRONAS Carigali Sdn Bhd and Optimal Chemicals Sdn
Bhd received the Gold Medal Award 2004 from the Malaysian
Society for Occupational Safety and Health (MSOSH), while
PETRONAS Gas Berhad (PGB), the National & International
Awards for Occupational Safety & Health Excellence 2004 also
from MSOSH. PGB’s Transmission Operations Division and the
Centralised Utility Facility also received the Royal Society of the
Prevention of Accident (RoSPA) Gold Medal Awards. The year
also witnessed our joint venture company, BP PETRONAS
Acetyls (BPPA), accredited as the Overall Winner (Platinum
Award) for the Chemical Industries Council of Malaysia’s
(CICM) Responsible Care Awards 2004.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 52
Education and Human Capital Development
HIGHLIGHTS
• Leadership Development, Succession Management,
Staff Assessment & Progression, Intensified
Performance Management and Mentoring &
Coaching programmes progressed smoothly to support
the Group’s business strategies.
The success of any well-thought out strategy lies in its
execution. We are fully aware of the crucial role played by our
employees in translating strategies into tangible results.
Indeed, the Group’s continued growth and accomplishments
have much to do with our competent and capable workforce.
52
PETRONAS is committed to developing high-performing
employees. With a growing workforce of 33,944 employees as
at 31 March 2005, the Group places great importance in
human capital development. Capability building and leadership
development remain top priorities. We continually seek to
attract, develop, enrich and retain talents to sustain the
Group’s success.
During the year, various development programmes continued
to be pursued to strengthen capabilities, develop leaders and
encourage positive mindset and behaviour change among our
employees. These programmes include leadership
development, succession management, intensified
performance management, mentoring and coaching.
To further promote staff development and cultivate a strong
learning culture, we are finalising the implementation of
eLearning courseware to our employees worldwide. The online
eLearning programme will allow employees to undertake
development courses at their own initiative and time, by
providing convenient and ready resources at their disposal.
PETRONAS eLearning Solutions Sdn Bhd, the provider of the
service and a subsidiary of PETRONAS, was accredited as a
Multimedia Status Company (MSC) during the year.
Our Universiti Teknologi PETRONAS (UTP) in Tronoh, Perak
expanded its enrolment to 4,655 students during the year
compared to 4,350 students a year ago. In addition to
Malaysians, we continue to sponsor an increasing number of
deserving international students from the host countries in
which we operate to study at UTP. Until the end of the financial
year, we have sponsored 321 international students from 17
countries to study at our university.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 53
Human capital development remains a
top priority of PETRONAS’ commitment
to attract, nurture and retain talents to
sustain the Group’s success.
53
THE YEAR IN REVIEW
Petronas AR05_review 7
54
7/9/05
4:36 PM
Page 54
Capability building, leadership
development and the right mindset – the
key focus of PETRONAS’ Corporate
Agenda – will transform the Group into a
high-performing organisation known for
its resilience and distinctiveness.
Petronas AR05_review 7
7/9/05
5:29 PM
Page 55
CONCLUSION
The financial year ended 31 March 2005 was indeed a
monumental year for PETRONAS. The outstanding financial
results and operational performance delivered have enabled
the Group to be an efficient value generator, as we continue to
hold our own amongst the larger players in the industry.
The Group recognises that having the right strategies, the right
leaders and the right mindset and attitude is critical in setting
the path ahead. We firmly believe that integrity must never be
compromised. We have long recognised the importance and
value of maintaining high standards of ethics and business
integrity. We believe that both results and the manner in which
those results are achieved matter. These fundamental beliefs
and values form the backbone of our business approach and
we are fully committed to excellence in everything we do.
These values are subscribed by all in the organisation and are
embedded in our culture.
As we move a step closer to realising our Vision “To Be A
Leading Oil and Gas Multinational of Choice”, the Group
continues to be guided by our Shared Values. Herein lies the
reason for the Group’s success. The Group is made up of
people who share the same vision and apply the same values
in pursuing that vision.
We are now well into the implementation stage of our
Corporate Agenda towards becoming a Global Champion.
The agenda has enabled us to significantly raise our
performance across all businesses and create true
distinctiveness to achieve sustainable value creation in our
growth.
On a final note, I would like to take this opportunity to express
my sincere appreciation to the PETRONAS family of more than
30,000 employees around the world who have individually and
collectively, through excellent teamwork, contributed to the
success we have achieved thus far. I would also like to express
my gratitude to the Government of Malaysia and the
Governments of PETRONAS’ host countries for their support,
as well as to the members of the Board of Directors for their
continued support, counsel and guidance.
Tan Sri Dato Sri Mohd Hassan Marican
Acting Chairman and President & Chief Executive Officer
30 June 2005
55
THE YEAR IN REVIEW
Driving this superior all-round performance is our strategy of
integration, adding value and globalisation. The Group remains
committed to this strategy, which has enabled us to evolve and
grow into what we are today and has served us well in
addressing the challenges and uncertainties faced by the
volatile oil and gas industry. The industry is still undergoing a
period of change with supply dynamics changing more rapidly
than ever. The general feeling is that this state of play is likely to
remain in the foreseeable future with oil price levels likely to
remain firm. We are confident that the Group has enough
in-built resilience to weather this volatile industry environment.
PETRONAS has certainly come a long way since its
incorporation over 30 years ago. While the Group continues to
expand and redefine its boundaries, we have remained true to
the legacy of trust that brought about our existence in the first
place. We remain steadfast in achieving a balance between
business results and ensuring that we execute our
responsibilities as stewards wherever we operate. We are
proud to have contributed positively towards nation building,
economic development and social improvements in the
countries where we operate.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 56
Globalisation makes us neighbours.
Respect makes us friends.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 57
EXTENDING OUR REACH
Petronas AR05_review 7
7/9/05
4:36 PM
Page 58
MAIN EVENTS
2004
14 APRIL
25 MAY
58
14 April
PETRONAS Research and Scientific
Services Sdn Bhd (PRSS) launched
the PETRONAS Steady State
Simulation Software or
PETRONASsim, a technology
innovation using the VMG Thermo
physical calculation method
that can be customised to meet
users’ requirements in optimising
plant operations.
17 May
PETRONAS became the title sponsor
of the 2004 Shanghai International
Race Festival, further boosting the
corporation’s brand presence and
awareness in China.
15 June
OGP signed a Shareholders’
Agreement with Sudapet Co Ltd for
the incorporation of a technical
services company in Khartoum,
Sudan.
25 May
PETRONAS signed two Production
Sharing Contracts (PSCs) with
Newfield Exploration Company of the
United States and PETRONAS
Carigali Sdn Bhd for Block PM318
offshore Peninsular Malaysia and
Deepwater Block 2C offshore
Sarawak.
25 June
PETRONAS launched a new
subsidiary company in Shenzhen,
China, known as PETRONAS
Marketing China Company Ltd to
oversee the expansion of its
petroleum products retail and
marketing activities in selected
markets in China as well as its future
foray into other related businesses in
the country.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 59
29 JUNE
14 JULY
59
MAIN EVENTS
29 June
All PETRONAS port facilities were
certified to be compliant with the
International Ships and Port Facilities
Security Code under the requirement
of the International Maritime
Organisation.
14 July
PETRONAS launched its range of
premium grade automotive and
motorcycle engine oils under the
brand names SYNTIUM and
SPRINTA respectively in China,
officially entering the country’s
lubricants market.
25 July
The PETRODAR Joint Operating
Committee, in which PETRONAS,
CNPC, Sudapet, Sinopec and AlThani are shareholders, signed
contracts for the development of
Melut Basin in Blocks 3 & 7, Sudan.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 60
MAIN EVENTS
22 AUGUST
31 AUGUST
60
11 August
PETRONAS, through its subsidiary
Asean LNG Trading Co Ltd, signed a
Gas Sales Agreement with British
Gas Trading Ltd, a subsidiary of
Centrica plc of the United Kingdom,
to supply up to 3.0 billion cubic
meters a year of natural gas for 15
years beginning 2007.
11 August
PETRONAS Carigali drilled Malaysia’s
longest development well, the
Angsi A-28ST-1, reaching a total
depth of 6,339 meters just 44 days
after it was spudded on 29 June.
18 August
The PETRONAS Visualisation Centre,
a state-of-the-art facility equipped
with the latest 3-D immersive
visualisation technology and the first
of its kind to be set up and owned by
a national oil company in Southeast
Asia, was officially launched.
22 August
Malaysian Prime Minister, Datuk Seri
Abdullah Hj Ahmad Badawi officially
opened Universiti Teknologi
PETRONAS. The ceremony was held
in conjunction with the university’s
fourth convocation, which also saw
the graduation of the first batch of
international students.
31 August
PETRONAS’ mobile library was
launched and introduced to primary
schoolchildren around Khartoum, to
encourage good reading habits
among them and to provide them an
avenue to pursue and acquire
information and knowledge.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 61
2 NOVEMBER
24 NOVEMBER
61
MAIN EVENTS
30 September
PETRONAS and Petroleum Authority
of Thailand (PTT), signed a PSC for
Block B-17-01 with the MalaysiaThailand Joint Authority. PETRONAS
and PTT will each hold 50% of the
participation interest in the PSC.
2 November
PETRONAS signed definitive
agreements with South Africa’s listed
energy and chemical company, Sasol
Limited, Worldwide African
Investment Holdings (Pty) Limited and
a Sasol black economic
empowerment entity, Tshwarisano
LFB Investment (Pty) Limited to
combine Sasol’s Liquid Fuels
Business and Engen Limited and its
subsidiaries in a new liquid fuels joint
venture, Uhambo Oil Limited, creating
South Africa’s largest liquid fuel
business.
24 November
Malaysia LNG Tiga Sdn Bhd, a
subsidiary of PETRONAS, signed an
agreement with Korea Gas
Corporation (KOGAS) to supply up to
2.82 million tonnes of LNG to KOGAS
commencing from October 2004 to
April 2008.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 62
MAIN EVENTS
2005
16 FEBRUARY
20 JANUARY
62
12 December
PETRONAS added another new
block into its upstream business
portfolio in Indonesia with its award of
a PSC for the North East Madura
Offshore Block IV by BPMIGAS.
24 December
PETRONAS signed a Sales &
Purchase agreement to acquire
Kuwait Petroleum (Thailand) Ltd
(KPTL) from Kuwait Petroleum
International Ltd whereby PETRONAS
will take over KPTL’s 117 operational
petrol stations located in major cities
in Thailand, as well as KPTL’s
lubricant sales business conducted
via the service stations and through
dealerships and direct customers.
7 January
The decommissioned Baram 8
structure which was converted into
an artificial reef, Malaysia’s first rig-toreef project led by PETRONAS, was
officially handed over to the Fisheries
Department of Sarawak.
10 January
PETRONAS, together with the
Philippines National Oil Company was
awarded a service Contract by the
Philippines Government to explore for
oil and gas in the offshore Mindoro
block in the Philippines.
20 January
ASEAN Bintulu Fertilizer Sdn Bhd, a
subsidiary of PETRONAS, signed a
Shareholders’ Agreement with
Namhae Chemical Corporation of
Korea to set up a joint venture
melamine production facility in
Bintulu, Sarawak.
20 January
PETRONAS officially introduced its
range of premium grade automotive
engine oils under the brand name
SYNTIUM in Switzerland and
Liechtenstein.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 63
1 MARCH
12 MARCH
63
MAIN EVENTS
16 February
PETRONAS awarded two PSCs to
Shell and PETRONAS Carigali for the
ultra-deepwater Blocks ND6 and ND7
off the east coast of Sabah.
2 March
PETRONAS signed a PSC with
PETRONAS Carigali and
ConocoPhillips for the Kebabangan
Oil Field offshore Sabah.
1 March
PETRONAS extended its sponsorship
agreement with the Malaysian
Basketball Association for another five
years to develop and promote
basketball into a national game under
the Rakan Sukan scheme, a
partnership which began in 1995.
7 March
Asean LNG Trading Company Ltd
(ALTCO) took delivery of its first
liquefied natural gas (LNG) cargo from
the Damietta LNG Complex in Egypt.
The feed gas to the LNG plant is
supplied by the West Delta Deep
Marine Concession Area in which
PETRONAS has a 50% working
interest.
12 March
PETRONAS commemorated its 10
years of involvement in Formula 1,
reflecting on a decade marked with
significant value-adding
developments and achievements
resulting from its participation in the
prestigious motor sport.
24 March
PETRONAS sponsored the
Responsible Care Awards 2005
organised by the Chemical Industries
Council of Malaysia reinforcing its
commitment towards continuous
improvement in all aspects of health,
safety and environment protection.
Petronas AR05_review 7
7/9/05
4:36 PM
Page 64
PETRONAS’ most important legacy is its
investment in the generations to come.
Petronas AR05_review 7
7/9/05
4:37 PM
Page 65
INVESTING IN THE FUTURE
CONTENTS
01
Corporate Statements
02
Company Profile
04
In Remembrance of the late Chairman
08
Board of Directors
10
Management Committee
12
Five-Year Financial Highlights
18
The Year in Review
58
Main Events
66
Financial and Legal Information
CONCEPT . DESIGN BY CHIMERA SDN BHD
PETRONAS ANNUAL REPORT 2005
PETROLIAM NASIONAL BERHAD (PETRONAS) COMPANY NO. 20076-K REGISTERED OFFICE TOWER 1, PETRONAS TWIN TOWERS
KUALA LUMPUR CITY CENTRE, 50088 KUALA LUMPUR, MALAYSIA T +603 2051 5000 F +603 2026 5050 www.petronas.com.my
ANNUAL REPORT 2005