Following are excerpts from a CNBC interview with Wan Zulkiflee Wan Ariffin, President and CEO of Petronas, and CNBC's Geoff Cutmore and Steve Sedgwick.
SS: Well, I'm delighted to welcome to the show an old friend, actually, Wan Zulkiflee Wan Ariffin, who is the President and CEO of Petronas, joins us now. Really nice to see you-,
WZ: Nice to see you, Steve.
SS: We haven't caught up for a-, a year or so, I think we were at a conference in-, in the Middle East, actually, which is probably a good place to start our conversation, as well. Geopolitical tensions in Venezuela, not new. Geopolitical tensions in the Middle East, not new as well. What are you doing, at your company, to-, to negate those oscillations in price, the oscillations in availability of product, as well, it-, it's a very difficult world, for the Asian buyer and seller of product.
WZ: You know, I think one-, one of the advantages of being an integrated company is that, you know, we are not-, we are not a pure upstream-, pure-, pure play upstream, so, you know, we-, we can have a natural hedging to all-, all this. You know, indeed, many, many things happened last year, we still expect volatility this year, and, you know, but I think it's important for us to focus on things that we are in control, our operations, our marketing, our supply chain, I think that's important.
SS: And-, and-, and the importance of gas is not lost on you, as well, the importance of LNG, as well. We-, we heard it from Monsieur Pouyanné, as well, how they are a gas and oil company, now, we hear a lot of that from the big majors now, as well. You're on a similar vein, aren't you?
WZ: Our portfolio, 70% is gas-,
WZ: And currently we are number three, in terms of the biggest LNG exporter. Our first cargo was in 1982, and we have actually delivered more than 10,000 cargos, Far East is-, is, of course, our strong market. Indeed, I think, with regards to the energy transition, I am confident that gas is the-, is the way to go. It's-, it's-, renewables are coming up, but, you know, it's *inaudible* to, uh-, yes.
GC: Given that you've just said that, can you just explain for us the investment, then, in this Indian solar tech business?
GC: Because that sounds like you're also hedging your bets here with renewable.
WZ: You know, we've got a three-pronged growth strategy, maybe if I can take you through very briefly.
WZ: I think the first one is to maximise cash generation. What that means is that, you know, our whole value chain should be a seamless one, so, you know, we should be good in exploration, production, our refineries should be working optimum, gas plants, and right up to marketing. So that's the first. The second prong in our growth strategy is to expand our core business. I think, if you have followed, you know, last year, many things happened.
WZ: We were in successful in, uh, Mexico-,
GC: We might have to hurry you up, a little bit, here-,
GC: There's only a couple of minutes left on the programme.
WZ: And the third one is stepping out, what we call stepping out, and this is looking at renewables. Of course, we-, we-, we are building our portfolio in renewables.
SS: Can I talk about the-, the-, the very profitable, but sometimes thorny, relationship with China, as well, and projects with China, as well. There's been a lot of criticisms about the One Belt and Road, and there's been a lot of praise for it, as well. Malaysia's experience is chequered, to say the least, as well. Do you think that One Belt and Road is necessarily something that's benefiting countries such as yours? Or do you think, actually, there needs to be better terms of trade?
WZ: You know, in-, China is a very important market for Petronas, you know, we sell a lot of LNG, petchem, and lubricants, we have got a big lubricants business in China. I think, so far, none of these political issues have affected, it remains to be a very important market, and we are expanding our business in China.
GC: Although, the Prime Minister, Mr Mahathir, has taken a very tough line on the Chinese. Is that going to hold back your opportunity?
WZ: I don't think so.
GC: You don't think so?
WZ: No, I don't think so. I think we have got-,
GC: But he has cancelled pipeline projects.
WZ: You know, there is-, it so happened that, you know, after 61 years, the country has got a new government, there are a lot of reforms in place-,
GC: It looks a lot like an old government, to me-,
WZ: No, no, no [laughs]-,
GC: That's come back.
WZ: It's-, it's a new government, and a lot-, a lot of reforms in place, and, uh, some-, some of the, uh-, uh, unprofitable projects are being reviewed. But for Petronas, I think our business-,
SS: Do you know, there's-, there's a theme in this show, and it's oil men not wanting to get involved in the political discussion, as well-,
SS: So we'll leave it there, nice to see you, we're running-,
WZ: Thank you, Steve.
SS: Right up against the end of the programme-,
WZ: Thank you, Geoff.
SS: I know that, because the anchor for the next show's turned up, Wan Zulkiflee Wan Ariffin, nice to see you, sir, let's not leave it a year and a half next time, President and CEO of Petronas.