KUALA LUMPUR (June 7): Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz is likely to continue leading the national oil firm.

"There is no reason for me to believe that it (my contract) will not be extended," said Taufik at an editors' briefing when he was asked about his contract that is due to expire at the end of this month.

“Ultimately, the decision (to renew or not renew his contract) is at the discretion of the prime minister," he added.

Speculation has been rife that there might be a change of the guards at Petronas when Taufik's contract ends.

Taufik, 49, took the helm at Petronas in mid-2020, succeeding Tan Sri Wan Zulkiflee Wan Ariffin.

He is Petronas' third president after Tan Sri Mohd Hassan Marican stepped down in February 2010. Hassan Marican is currently the adviser of Petronas. He was succeeded by Tan Sri Shamsul Azhar Abbas.

Taufik’s appointment came in June 2020, when the world was engulfed by the Covid-19 pandemic, which disrupted the steady recovery of crude oil prices, dragging it to the sub-zero territory.

Given the unprecedented health and economic crisis, the government turned to the national oil firm for more dividends to meet its fiscal needs. Petronas paid dividends of RM50 billion for the financial year ended Dec 31, 2022 — the second highest in history, and it is expected to pay RM40 billion for FY2023.

Judging by the cash flow generated, Taufik has said that Petronas could afford to meet the RM40 billion dividend commitment, although he noted that crude oil prices have come off their US$110 peak last year to trade slightly below the US$80-level.

He expects the average crude oil price to be in the range of US$81-U$85 per barrel this year.

The journey ahead is expected to be challenging, if not tougher for Taufik, with various uncertainties on the horizon.

He has a big task to fulfil — energy transition — which is something his predecessors did not have to grapple much with, besides striking a balance between meeting the national oil firm’s social agendas and making sure Petronas’ sovereign rating remains intact.

He has foreseen that oil majors’ profitability, including Petronas', will be affected in this transition, saying “green energy isn’t cheap”.

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