KUALA LUMPUR, Aug 13 — Malaysia’s state oil firm Petroliam Nasional (Petronas) said today its second-quarter net profit rose 38 per cent, driven by stronger oil production and sales of liquefied natural gas (LNG).

Net profit in the April to June period rose to RM21.06 billion from 15.26 billion ringgit a year earlier, Petronas said. Revenue in the quarter increased 14.7 per cent to RM85.36 billion from RM74.42 billion a year earlier.

Petronas, which finances more than a third of Malaysia’s government budget via dividends, has in recent years invested heavily in Canadian shale assets, Iraqi oil fields and explored for new reserves in Malaysia as part of its five-year 300 billion ringgit capex programme that ends in 2015.

Chief Executive Shamsul Azhar Abbas said declining oil prices and rising operational cost could dent earnings in the second half of this year.

“Things are not going to be easy moving forward,” he told reporters at a briefing. “It’s getting harder to develop oil and gas, and cost continues to increase.”

Shamsul said crude oil prices are expected to fall closer to US$95 (RM304.71) per barrel in the remaining part of the year. Oil prices averaged US$108.9 per barrel in the first six months of 2014.

Petronas’ total domestic and international production climbed 6.3 per cent in the second quarter to 2.2 million barrels of oil equivalent, from 2.07 million tonnes, as the Fortune 500 company ramped up output in Malaysia, Iraq, South Sudan and Canada.

Petronas plans to increase its overseas net profit contribution to 20 per cent from 11 per cent over the next five years, Shamsul added.

Shamsul said China’s Sinopec Group had received approval from the Chinese government to buy a 15 per cent stake in Petronas’ Pacific NorthWest LNG export facility and has agreed on a direct purchase of 3 million tonnes of LNG for five years.

Petronas announced in April that it will sell Sinopec Group, the parent of Hong Kong and Shanghai-listed top Asian refiner Sinopec Corp, a 15 per cent stake in the US$11 billion export terminal on Canada’s Pacific Coast. — Reuters