Petronas shelves 14 oil rigs to cut cost

In order to remain strog despite the slump in oil price, Malaysian oil company Petronas has decided to shelve 14 out of its 18 oil rigs within a year.

This mirrors the trend worldwide. For example, In the United States, rig counts have dropped significantly to 876 from close to 2,000 a year ago.

“Petronas has halted, at least for now, activities that cost more than a certain level. These will be reviewed when oil prices stabilise. We don’t know at what level but a more stable price at any point will allow the board to make better decisions,” says Public Investment Bank analyst Mabel Tan.

Analysts have pegged Petronas’ breakeven point for oil production at around US$45 per barrel, and prices over the last six months have been hovering at around US$55 – too close for comfort.