Petronas needs new direction to survive climate change, says MP
By Minderjeet Kaur, Free Malaysia Today (29 September 2021) PETALING JAYA: State energy firm Petronas has to change its business model to survive in the coming decades due to climate change. Wong Chen (PH-Subang) said it would need to focus instead on renewable energy, together with its contractors, vendors and suppliers. “Otherwise, Malaysia will face a catastrophe,” he said during his speech on the 12th Malaysia Plan (12MP) at the Dewan Rakyat. He said that according to reports by the inter-governmental panel on climate change, the world only has 11 years to ensure the earth’s temperature does not rise by 1.5°C.
“It will be catastrophic if we see a rise of beyond 1.5°C.”
Due to that, he said all countries needed to achieve zero carbon emissions as soon as possible. Malaysia, as an oil and gas producing country, was a major contributor to carbon emission and climate change.
Research by the International Energy Agency (IEA) in May this year shows that if the world wants to achieve net zero carbon emission by 2050, the use of hydrocarbons has to be reduced from 90 million barrels per day now to 25 million barrels per day of oil and gas.
“This means the (world) production of oil and gas will need to be reduced by 70% in three decades,” he said.
Wong Chen also said Petronas needed to “brace for the impact” after its revenue fell from RM240 billion before Covid-19 to RM180 billion in 2020.
“The 29% drop is from just one pandemic. “What happens if we have to face a bigger crisis,” he said, adding that the IEA has predicted that Petronas will see a contraction of RM72 billion a year.
At the moment, Petronas contributes RM30 to RM50 billion in taxes and dividends to the government. These, he said, would decline as Petronas meets the net zero carbon emissions.
He urged the government to start reducing “our severe dependency on oil and gas” and reform the sector under the 12MP.
“The next 30 years towards 2050 will just go by and Putrajaya needs to have an economic divestment as soon as possible to ensure Petronas can still contribute to the government.”