Petronas sees profit slide for third straight year as oil prices weigh on margins

Published Fri, Feb 27, 2026 · 06:03 PM

[KUALA LUMPUR] Malaysian state energy firm Petroliam Nasional, on Friday (Feb 27) warned of eroding margins amid persistent geopolitical and economic risks, as subdued oil prices saw its profits decline for the third straight year.

Petroliam Nasional, or Petronas, reported a profit after tax of RM45.4 billion (S$14.76 billion) in 2025 compared with RM55.1 billion in 2024, while revenue fell to RM266.1 billion from RM320 billion over the same period.

Chief executive officer Tengku Muhammad Taufik Tengku Aziz said the decline was in line with industry peers, with oil prices falling amid oversupply concerns and macroeconomic challenges.

“We have seen margin erosion manifest in our results, but we will see this come under more pressure as cost inflation converges with prices softening,” he told a press conference.

The firm would focus on building resilience by strengthening its core hydrocarbons portfolio, as well as grow new businesses and manage emissions moving forward, he said.

Petronas is a significant source of revenue for Malaysia’s government, its sole shareholder, contributing billions to public coffers annually. The company paid the government RM32 billion in dividends last year. Muhammad Taufik said Petronas expects to pay RM20 billion this year – the lowest since 2017 – reflecting a need for the firm to ensure sufficient cash flow.

“(The dividend) is always going to be governed by our affordability,” he said. Petronas last year embarked on a “right-sizing” exercise, aiming to cut about 5,000 employees to ensure its long-term survival. Muhammad Taufik said on Friday the process was expected to conclude by August.

Crude oil prices were expected to trade rangebound between US$65-US$70 per barrel over the next five years, with the firm allocating RM2 billion annually for exploration in the same period, Petronas said.

Capital investments slipped to RM41.6 billion in 2025 compared with RM54.2 billion in 2024, the company said.

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Petronas’ upstream business saw a decline in post-tax profit to RM26.2 billion in 2025. Its gas and maritime business saw profit rise to RM20.9 billion, while its downstream segment posted a loss after tax of RM1.9 billion. Petronas reported a 2.2 per cent increase in carbon emissions in 2025 to 56.95 million tons of carbon dioxide equivalent emissions, attributed mainly to the transfer of operations for two production sharing contracts.

The firm also reported a 72 per cent reduction in methane emissions, exceeding its target of 50 per cent. REUTERS