By Ying Xian Wong

KUALA LUMPUR, Malaysia--Petroliam Nasional's second-half net profit fell 16%, weighed by lower crude oil and gas prices and impairment losses on assets.

Malaysia's national oil-and-gas company, better known as Petronas, on Friday posted net profit of 17.14 billion ringgit, equivalent to $4.41 billion, for the six months ended December, compared with 20.46 billion ringgit a year earlier.

Revenue for the period fell 8.7% to 133.57 billion ringgit, mainly due to lower average realized prices of liquefied natural gas, crude oil condensates, petroleum products and foreign-exchange effects.

For the full year, profit fell 17% to 40.78 billion ringgit and revenue declined 17% to 266.14 billion ringgit.

Petronas paid 32 billion ringgit in dividends to the Malaysian government last year, Chief Financial Officer Liza Mustapha said at a press conference. For 2026, its board approved a 20 billion ringgit payout to the government, the lowest in nearly a decade.

The drop underscores Petronas's more conservative stance as energy prices moderate and global volatility persists.

Chief Executive Tengku Muhammad Taufik said that the sector will likely continue to face geopolitical headwinds, adding that the company will complete its "right-sizing" initiative by August, streamlining about 10% of its workforce by August.

Analyst Khairul Fahmi of Public Investment Bank, which has a neutral rating on Malaysia's oil and gas sector, noted Petronas's more cautious approach to its investment allocation ahead. The state oil company is tightening upstream spending and shifting its focus to optimizing brownfield assets to sustain output at lower costs, he said in a note after the company released its 2026-2028 activity outlook last month.

Despite Brent averaging $68.2 a barrel in 2025, sector activity was broadly lackluster due to project delays, cost pressures and cautious investment, he wrote. With oil prices expected to average around $60 a barrel in 2026, some planned projects have been deferred as Petronas prioritizes cash flow and capital efficiency, while continuing to support the domestic oil and gas services sector, he said.

Petronas is also dealing with legal tensions over gas rights in the state of Sarawak, adding a layer of uncertainty to its operating outlook. The Borneo state holds a large share of Malaysia's gas reserves, and Petronas operates one of the world's largest liquefied-natural-gas facilities there.

Petronas and state-owned Petroleum Sarawak remain in a protracted dispute over control of Sarawak's gas assets, with both sides seeking rulings from the federal court on the scope of federal and state powers. The hearing is scheduled for March 16.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

February 27, 2026 05:41 ET (10:41 GMT)

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