PETRONAS HAS NO PLANS TO CUT BACK ON EXPLORATION DESPITE CURRENT ECONOMIC

KUALA LUMPUR, Dec 4 (Bernama) -- Malaysia's national petroleum company,
Petronas, has no plans to cut back on its exploration activities despite the
current volatile economic environment.

"However, the oil and gas industry now needs to relook its business
model," said Petronas president and chief executive officer Hassan Marican, when
speaking to reporters on the sidelines of the Third International Petroleum
Technology Conference here Wednesday.

"Due to the credit crunch and economic crisis, we need to look at doing
things together, such as having greater alliances and partnerships between
national and international oil companies," Hassan said.

According to Hassan, even the refining margins for the downstream sector
has eased off from a previous high as a lot of petrochemical facilities were
being shut down due to lack of demand.

"We have brought our plants down in Kertih. There you see resins stacked
up high as there is no demand. The first to get hit is always the polymers, the
resins, because they are very much consumer goods driven," he said.

He said resins are used for the automotive, electronics sectors and all
consumer goods used petrochemical resins.

"It is unprecedented to see the world in this situation. When there is no
demand, even with the price of resins declining tremendously, it is pointless
producing. How long this situation will last, I don't know," he said.

Meanwhile, he said Petronas had the funds and the capacity to borrow to
undertake projects.

"We are lowly geared. We have, like any other oil firms, sufficient
internal fundings to fund the projects that we have," he added.
-- BERNAMA