Among the steps that have been taken on this green journey is the installation of solar panels on the rooftops of buildings within the Universiti Teknoloji Petronas campus in Seri Iskandar, Perak.
The installations are managed by Gentari Sdn Bhd, Petronas’s green energy subsidiary launched in June.
Along with renewable power, Gentari is involved in hydrogen production and installs electric vehicle charging stations. The unit aims for a renewable energy portfolio with a capacity of 30 to 40 gigawatts by the end of the decade.
Gentari plans to field a network of 25,000 EV charging stations as well, aiming for the ambitious goal of capturing a 10% share of those stations in both India and Malaysia. It has swiftly installed 107 units in India.
Petronas is investing heavily in green energy through Gentari because the group faces the urgent task of transforming a business model dependent on fossil fuels.
Investors and consumers are expressing growing interest in environmental, social, and corporate governance (ESG) goals. In response, Petronas has declared it will attain net zero greenhouse gas emissions by 2050.
The company will need to decarbonize both upstream, such as exploration, and such downstream operations as processing and distribution to meet its target. In the renewable energy field, Petronas in June entered into a collaboration with Microsoft to improve efficiency using artificial intelligence and data.
If Gentari is one way to achieve net-zero, then carbon capture and storage (CCS) is the other. Also in June, Petronas and Japanese trading conglomerate Mitsui & Co agreed to conduct feasibility studies on developing a “value chain” of CCS sites in Malaysia.
“This is one of the many efforts to establish Malaysia as a leading CCS solutions hub in the region,” said Emry Hisham, head of carbon management at Petronas.
There also are plans to launch its first carbon storage operation off the island of Borneo at the Kasawari gas fields by the end of 2025, with the goal of cutting carbon dioxide by 3.7 million metric tons a year. The facility is expected to store 76 million tons in total, making it one of the biggest CCS operations on the planet.
Apart from Mitsui, Petronas is collaborating with Shell, Samsung Group and Japan Petroleum Exploration in an attempt to absorb knowledge from all corners.
Making this pivot notable is that Petronas is investing in new businesses that are not expected to be highly profitable in the short term. These moves are possible because of the robust earnings the group has been enjoying as of late.
On Tuesday, Petronas announced that it generated a RM41.4 billion net profit on revenue of RM172.1 billion during the first half of 2022. Both numbers represent all-time highs for a six-month period.
That six-month profit is roughly on par with the RM41.7 billion earned for the full year in 2021, thanks largely to the rally in global energy prices.
Tengku Muhammad Taufik, president and group CEO of Petronas, expressed confidence in the strong earnings while reiterating the company’s net-zero ambitions for 2050.
“Petronas remains resolute in ensuring that energy continues to be produced and delivered responsibly and sustainably,” he said.
Although the markets for renewable energy and EV charging stations are considered all but guaranteed to expand, those sectors are rife with multinationals and start-ups competing fiercely to capture market share. Petronas will not face an easy task in attempting to dominate every relevant sector in the Asian market, and it may see the day in the mid-to-long term when it will be forced to narrow its focus.