KUALA LUMPUR (June 5): Tan Sri Wan Zulkiflee Wan Ariffin, who is better known as Wan Zul, is said to be stepping down as the president and CEO of Petroliam Nasional Bhd (Petronas), after helming the company for five years.

According to sources, the resignation is expected to be announced soon, and that an internal candidate will succeed him.

It is unclear at this juncture why Wan Zul has decided to leave the national oil firm where he has spent his entire career.

Wan Zul’s contract was renewed for three years from April 1, 2018. Market talk often surfaces that he won’t be in his posts for long whenever there is a change in government.

He took over Petronas' leadership in the first quarter of 2015 at a time when crude oil prices had crashed below US$30 per barrel.

In the five years since then, he has had an extremely challenging task compared with his predecessors to safeguard the country’s oil wealth when the world entered into a new era of low oil price environment, while the government turned to Petronas for more dividend.

Two weeks ago, Wan Zul announced that Petronas would be cutting its capital expenditure for the financial year ending Dec 31, 2020 by 21% from its initial estimate of around RM50 billion, as it was facing challenges driven by the pandemic outbreak that had led to a supply-demand shock in the oil market this year.

It would also be reducing its operating expenditure (opex) by 12%.

This marks yet another bold move that Wan Zul has taken during his tenure as the chieftain of Petronas.

The news came after Petronas’ profit after tax shrank by 68% to RM4.52 billion from RM14.25 billion a year ago.

Last year, Wan Zul disagreed with divesting Petronas’ equity stake in public-listed entities and the proposal to list its upstream operation to raise money for the Federal Government. To him, these assets are Petronas’ currencies, which should only be divested as a last resort in desperate times.

In 2016, he retrenched 1,000 staff and froze salary increments for top management, starting from vice-president, due to the prolonged industry-wide slowdown. This made him unpopular as job retrenchment at the national oil firm was considered an unthinkable option.

“As long as I am in this position, I will do my best to discharge my responsibilities and duties. And it goes deeper than just discharging my duties.

“When you are in a position of trust, you discharge your duties and responsibilities according to that trust. This concept of amanah is at the very core of the Petronas DNA,” Wan Zul said in a past interview with The Edge when asked to comment on the rumours about him leaving Petronas.

https://www.worldoil.com/news/2020/6/17/sau...-demand-weakens

Saudis suspend work, delay expansions as oil demand weakens

DUBAI (Bloomberg) - The world’s biggest oil exporter is hitting the brakes in developing some of its crude and natural gas deposits, idling two offshore drilling rigs as the coronavirus batters energy use.

State-run producer Saudi Aramco has suspended work at the two platforms for about a year, according to filings from the contractors. The producer is also delaying a related $18 billion oil and gas expansion project by at least six months, according to people with knowledge of the situation.

Aramco declined to comment on the status of the rigs or the project.

The pullback marks a rare pause in Aramco’s efforts to drill wells, discover fields and expand known deposits to replace the barrels it’s pumping from the planet’s largest conventional oil reserves. The halts also raise questions about the kingdom’s supply of natural gas, much of which is found in crude reservoirs. Saudi Arabia needs gas to generate electricity and make chemicals.

Cutting back on field development could be a way “to save money in the current situation,” said Robin Mills, founder of Dubai-based consulting firm Qamar Energy. “There’s no point spending on production where it’s not needed.”

Oil producers worldwide are slashing spending and putting projects on hold as the plunge in prices since last year imperils profits. Major suppliers, including the Saudis, are curbing output in response to the pandemic. Although prices for benchmark Brent crude have more than doubled since late April, demand is returning only slowly and risks of a second wave of infections persist.

Dubai-based Shelf Drilling Ltd. said Monday that operations at its offshore rig High Island IV, contracted to Aramco, would be suspended at the client’s request for as long as a year. Another contractor, London-based Noble Corp., said last month that the rig Noble Scott Marks, working at the Marjan field in the Persian Gulf, would stop operations for a year, beginning in mid-May.

Aramco is delaying a project to expand oil and gas output at the Marjan and Berri fields for a period of six months to a year, said the people with knowledge, who asked not to be identified while discussing private matters.

The planned expansion would increase oil-production capacity at the fields by 550,000 barrels a day, to a combined 1.35 million, according to the International Energy Agency. The project would also boost gas flows by 2.5 billion standard cubic feet a day, sending gas by pipeline from Marjan to an onshore processing plant at Berri for domestic use.

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