Petronas is set to reduce its dividend contribution to Malaysia's budget by 38% in 2026 due to declining oil prices and a challenging macro environment.
The contribution of national energy giant Petronas to Malaysia ’s budget is expected to crash by 38% next year, to the lowest level since 2017, amid falling oil prices . Petronas is set to pay to Malaysia $4.
7 billion 20 billion Malaysian ringgit in 2026, down from $7.6 billion 32 billion ringgit it is contributing this year, the Finance Ministry said in its 2026 budget on Friday. The decline of the dividends from Petronas will be the result of expected lower Brent oil prices next year. According to Malaysia’s Finance Ministry, Brent Crude prices are set to average between $60 and $65 per barrel in 2026, down from about $70 per barrel average price estimated for this year. Last month, Petronas flagged challenging macro environment in its first-half earnings. The Malaysian national oil firm booked lower revenues and profits amid falling oil prices and a challenging macro and operational environment, which also led to a 3% decline in first-half oil and gas production. Petronas reported a 24% decline in revenues and a 19% drop in profit after tax, due to divestments, unfavorable foreign exchange rates, and lower average realized prices from petroleum products, crude oil, and condensates following the downward trend in benchmark prices. The national oil company’s average total daily production of 2.403 million barrels of oil equivalent per day boepd in the first half of 2025 was 3.2% lower compared to the 2.482 million boepd for the same period in 2024, mainly due to lower gas production from domestic operations and lower liquid production from the international portfolio. Petronas has been struggling to boost output in Malaysia, while the volatile and challenging macro environment in the first half of the year contributed to the lower earnings and deepened the crisis. In June, the company announced it would reduce its total workforce by about 10%, “as it navigates a polycrisis driven by global pressures, coupled with heightened challenges to unlock the full potential of its oil and gas resources in Malaysia.” By Tsvetana Paraskova for Oilprice.com More Company News From Oilprice.com Petrobras and Federal Government Announce $460 Million Investment in Bahia Luxor Technology Expands into Energy Management for Crypto Miners Repsol Pioneers 100% Renewable Gasoline Production in Spain
Malaysia Oil Prices Dividends Brent Crude Energy National Oil Company Macro Environment Production Decline Workforce Reduction
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