The company will allocate a larger share of its future capital expenditure toward projects stretching from Canada to Brazil as oil prices recover from the 2014 crash and as it completes a US$27 billion refinery and petrochemicals project at home, said Petronas CEO Wan Zulkiflee Wan Ariffin.
Last week, it agreed to buy stakes in two offshore fields in Brazil, further expanding its Americas portfolio.
“There is a lot of new opportunity for us in that part of the world,” Wan Zulkiflee said in an interview, adding that the shifting focus doesn’t mean the company is leaving its home country.
Petronas still has “many more projects lined up” in Malaysia, including plans to boost spending on renewable energy, he said.
Petronas typically allocates RM45 billion to RM55 billion on capital expenditure every year and upstream projects will have “a bigger chunk” of that going forward, Wan Zulkiflee said.
One of those to get a slice of the spending boost will be a liquefied natural gas export venture in western Canada with Royal Dutch Shell Plc.
Petronas last year agreed to buy a 25% stake in the C$40 billion LNG Canada project.
Construction costs will increase over the next few years and Petronas will need to boost spending on gas drilling, Wan Zulkiflee said.
The company also plans to invest US$2.3 billion over four years in Argentina’s Vaca Muerta shale oil fields with state-controlled YPF SA, and has interests in 10 offshore blocks in Mexico. Drilling in Mexico will begin in the third quarter.
The purchase of stakes in Brazilian oil fields from Petroleo Brasileiro SA for US$1.29 billion will bring commitments for more spending as the companies drill to boost production, Wan Zulkiflee said.
Still, more spending doesn’t mean more borrowing.
The company has no plans to tap the bond market and is cash-rich, he said.
Petronas had RM172.5 billion of cash and cash equivalents as at Dec 31, according to its latest financial statement.
Petronas is also looking to build up its renewable business. The company made its first foray into cleaner energy this month after agreeing to buy Amplus Energy Solutions Pte from I Squared Capital, amassing 500 megawatts of solar power in operation or under development.
Petronas plans to set aside as much as 5% of its annual capex toward this segment and will be looking at further opportunities in Malaysia, focusing on solar and wind, Wan Zulkiflee said.