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Industry Overview

PETRONAS GROUP Financial Results Announcement

Quarter 1 Financial Year 10/11April - June 2010

F8

Industry Overview

Cautionary StatementForward-looking statements involve inherent risks and uncertainties. Should one or more of these or other uncertainties or risks materialise, actual results mayvary materially from those estimated, anticipated or projected. Specifically, but without limitation, capital costs could increase, projects could be delayed, andanticipated improvements in capacity, performance or profit levels might not be fully realised. Although PETRONAS believes that the expectations of itsmanagement as reflected by such forward-looking statements are reasonable based on information currently available to it, no assurances can be given thatsuch expectations will prove to have been correct. Accordingly, you are cautioned not to place undue reliance on the forward-looking statements, which speakonly as of the date they are made. PETRONAS undertakes no obligation to update or revise any of them, whether as a result of new information, futuredevelopments or otherwise.

All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic,mechanical, photocopying, recording or otherwise) without the permission of the copyright owner. PETRONAS makes no representation or warranty, whetherexpressed or implied, as to the accuracy or completeness of the facts presented. PETRONAS disclaims responsibility from any liability arising out of reliance onthe contents of this publication.

©2010 PETROLIAM NASIONAL BERHAD (PETRONAS)

Industry Overview


Industry OverviewDato’ Shamsul Azhar Abbas

President & CEO, PETRONAS

0

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Jan-Mar 2008

Apr- Jun 2008

Jul-Sept 2008

Oct-Dec 2008

Jan-Mar 2009

Apr- Jun 2009

Jul-Sept 2009

Oct-Dec 2009

Jan-Mar 2010

Apr- Jun 2010

World oil demand (LHS) World GDP growth (LHS) Brent (RHS)

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00 01 02 03 04 05 06 07 08 09 10

Inventory Swing is a Useful Leading Indicator for Industrial Activity

Inventory/Sales Ratio: Durable Goods (LHS inverted)

ISM Manufacturing Index (RHS)

Industry Overview Global GDP growth rate upturn from end 2009, but gradually easing …

Fiscal spending led demandeuphoria saw a bounce in GlobalGDP.

Emerging Economies led theway, powered by exportsrecovery from restocking andimproved private demand.

World oil demand followed suitaided by robust demand fromemerging economies and globalinventory swings from thetrough of 2009.

Brent prices recovered over theperiod, but eased back fromUSD81.30/bbl in Jan – Mar toUSD77.90/bbl in Apr – Jun onconcern over escalating EuroZone debt crisis and re-emergence of systemic cracks inthe financial markets.

Source: IMF, IHS CERA, Bloomberg

USD/ barrel

INDUSTRY OVERVIEW

Source: Bloomberg

∆%, annual rate Index

% y-o-y

Inventory/ PMI trough

Fiscal led Recovery peaked?

World GDP growth, world oil demand and Brent prices

Page 1

84.3 86.4

51.3 52.4

33.0 34.0

0

20

40

60

80

100

Apr-Jun 2009 Apr-Jun 2010

Global Oil Production Non OPEC OPEC

83.9 86.6

44.5 45.239.4 41.4

3.9 4.0

0

20

40

60

80

100

Apr-Jun 2009 Apr-Jun 2010

Global OECD Non OECD China

Crude Oil Production& Demand

Global oil production increased y-o-y by 2.5%:

OPEC production up by 3.0% despite unchanged OPEC productionquotas of 24.8 mil bpd due to ongoing non compliance by selected OPECmembers.

Non OPEC production was also up by 2.1% principally from:o Latin America (+0.2 mil bpd);o Commonwealth of Independent States (+0.2 mil bpd); ando North America (+0.4 mil bpd).

Non OPEC crude production to average 52.4 mil bpd (2010) & 52.8 mil bpd(2011) with production increases anticipated from Brazil, Azerbaijan,Colombia, Ghana and Oman.

Global oil demand increased by 3.2% y-o-y in line with higher economicactivities:

Non OECD 5.1% OECD 1.6%

World oil demand is expected to hover around 86.5 mil bpd (2010) andmarginally increase to 87.8 mil bpd (2011), all things being equal.

Crude production and demand trended in line with the economic turnaround …

Source : IEA

Global Oil Demand

Global Oil Production

INDUSTRY OVERVIEW

Mil

bp

dM

il b

pd

Page 2

Key Trends & Developments in the Oil and Gas Industry Apr - Jun 2010 …

INDUSTRY OVERVIEW

Greater public scrutiny of deepwater operations arising from the Deepwater Horizon incident.

Active upstream M&A’s, led by Chinese NOCs.

Upstream cost is trending upwards.

Crude oil price strengthened further to average US$78.65/bbl in Apr – Jun 2010 due to favourable economic outlook in major economies and improved sentiments in the financial market.

Global oil demand marginally increased to 86.2 million bpd in Apr – Jun 2010 due to stronger demand from emerging and developing economies especially from China and the Middle East.

Global oil supply averaged 86.3 million bpd in Apr – Jun 2010 in line with incremental increase in production from Iraq.

Refining margins increased due to shutdowns and asset closures in OECD Europe, Pacific and Latin America.

Resilient demand growth in China combined with seasonal restocking pattern along the value chain have resulted in strong upturn in product prices.

Rising US shale gas production has enhanced the attractiveness of US petrochemical product competitiveness.

Delayed capacity build-up of low cost Middle East producers due to recession has allowed Asia Pacific players to leverage on regional market growth.

E&P

OIL

GAS

PETROCHEMICALS

Industry Overview

Accelerated North America investments in unconventional gas assets by leading Asia’s NOCs.

LNG demand is projected to remain positive despite the development of unconventional gas resources in the US, Canada & Australia.

LNG prices are projected to be robust in the near term and gas pricing to remain non-uniform.

Page 3

Structural changes in demand behaviour

and its effects on the global economy is the ... “New Reality”

The New Reality –global demand focusing on “needs” rather than “wants” …

INDUSTRY OVERVIEW

Industry Overview

Prospects for a sustained global recovery in the short to medium term appear questionable.

This recession is deeper with a much slower recovery.

Prolonged downturn despite massive fiscal stimulus?

“L- Shaped” or worse still “W-Shaped” recovery resulting from consumers focusing on “needs” rather than “wants”?

Are companies robust enough to survive an extended period of: low volumes and margins; against a background of tight credit markets; and continuing volatility in oil and currency markets.

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0 12 24 36 48

July 1981 - November 1982

July 1990 - March 1991

March - November 2001

CURRENT

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-4

-2

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2

4

6

8

10

12

14

16

0 12 24 36 48

July 1981 - November 1982

July 1990 - March 1991

March - November 2001

Cumulative change in US employment and GDP from start of recession: the recent one and three previous

Months after each recession’s start

Months after each recession’s start

CURRENT

Employment

GDP

Page 4

%

%

Source: The Wall Street Journal 2010

PETRONAS strategies aim to enhance the Group’s robustness by HIGH GRADING & RATIONALISING our asset portfolios

President’s Message The New Reality – PETRONAS strategies to Enhance Robustness

INDUSTRY OVERVIEW

We will continue as a global player but with a greater emphasis on DomesticDeepwater & Unconventional plays to arrest domestic production declines.

EOR (Enhanced Oil Recovery) & IOR/IGR (Improved Oil Recovery/Improved GasRecovery) to improve further recovery rates from existing fields.

New Investments Decisions driven by Ranking, Opportunity Costs and StrategicImpact among the various businesses along PETRONAS integrated value chain.

We aim to be

RIGOROUSLY FRUGAL in our decisions, ensuring

TRANSPARENCY & abiding by

self imposed CORPORATE GOVERNANCE STANDARDS of INTERNATIONAL levels.

Page 5

Industry Overview


Financial HighlightsDatuk George Ratilal

Executive Vice President

Finance

PETRONAS Group recorded improved financial performance, Revenue was RM 58.6billion, 26.3% (RM 12.2 billion) higher than the same period last year, mainly attributableto higher product prices.

Profit Before Taxation and Net Profit After Minority Interests were also higher by 39.0%and 59.7%, respectively on the back of enhanced operational efficiencies and costoptimisation initiatives, evident in ROR, ROACE and ROTA improvements.

Dividend for financial year ended 31 March 2010 amounted to RM 30.0 billion.PETRONAS expects to maintain similar dividend amount for this financial year.

55

60

65

70

75

80

85

Apr-June 2009

July - Sept 2009

Oct - Dec 2009

Jan - Mar 2010

Apr - June 2010

WTI Brent Tapis OSP

160

170

180

190

200

210

220

Jan - Mar 2009

Apr - June 2009

July - Sept 2009

Oct - Dec 2009

Jan - Mar 2010

Apr - June 2010

UCCI DCCI

FINANCIAL HIGHLIGHTS

Financial performance impacted by economic turnaroundKey Financial Highlights

Benchmark crude prices strengthened amid economic turnaround

…nevertheless cost pressures remain elevated

PETRONAS Group In RM Billion

Key Financial Highlights Quarter 1 Ended 30 June

FY10/11 FY09/10 +/-

Revenue 58.6 46.4 26.3%

EBITDA 25.2 19.4 29.9%

Profit Before Taxation 21.4 15.4 39.0%

Net Profit After Minority Interest 12.3 7.7 59.7%

Return on Revenue (ROR) 36.5% 33.2% 3.3%

Return on Average Capital Employed (ROACE) 30.9% 24.2% 6.7%

Return on Total Assets (ROTA) 20.6% 15.6% 5.0%

Page 6Source : CERA Research August 2010

Note: UCCI = Upstream Capital Cost IndexDCCI = Downstream Capital Cost Index

USD

/Bb

lIn

dex

Note: WTI = West Texas IntermediateOSP = Official Selling Price

Note: ROR & ROTA: Profit Before Tax (PBT); ROACE: Profit Before Interest & Tax; EBITDA: PBT, Minority Interests & Extraordinary Items + amounts previously deducted for depreciation, amortization, impairment loss on property, plant & equipment, financing costs. Financials: Rounded up to 1 decimal place (RM Billion).

16.8% 16.3% 13.9% 13.6% 16.2%

35.4%

31.2%27.5%

31.5%

41.6%

23.0%

17.4%15.8%

15.9%17.6%

FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 Q1 FY09/10

Q1 FY10/11

Gearing Ratio

14.5%17.8%

19.4% 20.2% 20.2% 18.3%16.3%

35.1%31.1%

35.8%31.9%

35.9%

48.3% 48.2% 49.3%

41.5% 39.4%

FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 Q1 FY09/10

Q1 FY10/11

EBITDA / Revenue

41.8%43.0%

33.1%31.5% 30.7% 31.8%

14.0%24.7% 23.9%

18.3% 19.6%

12.7%

41.6% 40.9%

45.4%

36.8%

25.0%

FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 Q1 FY09/10

Q1 FY10/11

Return on Average Capital Employed (ROACE)

24.2%

30.9%

Industry Comparison


Note:

Results of oil majors (IOCs) and national oil companies (NOCs) were on respective companies financial year ended 31 Dec, based on publicly available information. PETRONAS’ financial year end based on 31 Mar.

IOCs = ExxonMobil, Chevron, RD Shell & Total SANOCs = Gazprom, Petrobras, PetroChina & Statoil ASA

On y-o-y basis, EBITDA/Revenue and ROACE

at par with the more established players, on the back of strengthened prices and improved market sentiments.

Gearing remains relatively low despite the August 2009 bond offering which nudged Gearing up slightly, at par with the IOCs and well below NOCs.

PETRONAS IOC NOC

Key financial ratios reflect PETRONAS’ resilient performance

Page 7

14.9

11.025.1

6.3

Gross Revenue by Business Segment

RM 70.9 Billion RM 57.3 Billion

FINANCIAL HIGHLIGHTSRevenue & Operating

Profit AnalysisGross Revenue strengthened in core businesses

Downstream contributed 43.7% of Gross Revenue, 92.0% (RM 28.4 billion) wasfrom Trading, Refining and Marketing.

Favourable LNG prices supported the higher contribution from Gas & Powerwhilst E&P benefited from higher crude prices.

Gross Operating Profit improved from RM 15.1 billion to RM 21.4 billion (41.7%),reflecting improvement in total cost over revenue continuous efforts in drivingcost efficiencies despite challenging cost environment.

E&P Gas & Power

Downstream Corporate & Others

Note: Gross Revenue and Gross Operating Profits include both third party and inter-segments transactions.Financials: Rounded up to 1 decimal place (RM Billion).

Q1 FY09/10Q1 FY10/11

RM

Bill

ion

19.8

15.1

31.0

5.0

11.8

7.7

6.2

4.9

2.0

2.2

1.4

0.3

Q1 FY10/11 Q1 FY09/10

Gross Operating Profit by Business Segment

21.4

15.1

Q1 FY10/11 Q1 FY09/10

Improvement InTotal Cost/Revenue

70.9 %

68.5 %

E&P Gas & Power

Downstream Corporate & Others

Page 8

9.6% 9.7%

58.9%48.7%

25.5%35.7%

6.0% 5.9%

30 June 2010 31 March 2010


Group’s Balance Sheet remains robustFinancial HighlightsBalance Sheet

PETRONAS Group In RM Billion

Selected Balance Sheet Items30 June

2010

31 March 2010

+/-

Property, Plant & Equipment 186.6 181.8 2.6%

Total Assets 414.7 410.9 0.9%

Shareholder’s Funds 236.2 242.9 (2.8%)

Borrowings 51.3 51.9 (1.2%)

Total Debt/Total Assets 0.12x 0.13x -

Page 9

The Group’s Balance Sheet remains strong with total assets growing by 0.9%driven by additions of oil and gas assets within E&P.

Gearing Ratio remains undemanding, enabling higher levels of flexibility forfuture financing requirements.

Despite the ‘New Reality’ of volatile prices and high costs environment, theGroup is forging ahead in assessing and capitalising on expansionaryopportunities, as we remain focus on our long-term growth strategy forintegration, value creation and globalisation.

30 June 2010 31 March 2010

17.8%17.6%

Gross Gearing Ratio

Borrowings by Maturity

10 – 20 years5 – 10 years

1 to 5 years< 1 years

51.3 51.9

RM

Bill

ion

Note: Financials: Rounded up to 1 decimal place (RM Billion).

Exploration and

Production BusinessDato’ Wee Yiaw Hin


Exploration & Production

Achievements Q1 FY10/11

Renewal / Awarded Contracts PM 6/12, PM Block Sepat, SB 307/308

1st Production D1 Cluster (D30 Field) achieved 1st oil (4.8 kb/d)

Major Milestones 6 projects achieved major milestones

HSE Recorded 0.15 TRCF

EXPLORATION & PRODUCTION BUSINESS

Malaysia Summary

Malaysia’s PSC by region and phase TotalPeninsular Malaysia Sarawak Sabah

Exploration 25 4 8 13

Development 15 6 3 6

Production 34 18 11 5

Total 74 28 22 24

Page 10

Exploration and Production Business in Malaysia remains vibrant with planned activities in unconventional plays

OperatorsTotal PSCs

E D P

PETRONASCarigali

25 7 6 12

Shell 12 3 2 7

Murphy 6 2 2 2

ExxonMobil 5 - - 5

Talisman 5 2 - 3

Newfield 4 2 1 1

Nippon 2 1 - 1

Lundin 4 4 - -

BHP Biliton 2 2 - -

Others 9 2 4 3

74 25 15 34

Note: E = Exploration phase ; D = Development phase; P = Production phaseOther Operators : TOTAL, Petrofac, CH Mutiara, KPOC, PCPPOC, MDC, HESS

P E N I N S U L A R

M A L A Y S I A

S A R A W A K

S A B A H

Kalimantan(Indonesia)

South China Sea

B R U N E I


Malaysia Total Production

Malaysia`s total oiland gas productionfor Q1 FY10/11 ishigher by 0.3%compared to sameperiod last year,due to improvedoverallperformance.

Gas production ishigher due tohigher demand bycustomers.

945 935

537 536

110 116

Q1 FY10/11 Q1 FY09/10

1,5871,592

Malaysia`s Production by Products

Crude CondensateGas

kbo

e/d

PETRONAS continues to sustain production despite maturing fields

38% 40%

49% 47%

13% 13%

Q1 FY10/11 Q1 FY09/10

Malaysia`s Production

1,5871,592

SabahSarawakPeninsular Malaysia

kbo

e/d

Page 11

67.8% 68.3%

32.2% 31.7%

Q1 FY10/11 Q1 FY09/10

634 639

364 362

81 83

Q1 FY10/11 Q1 FY09/10

EXPLORATION & PRODUCTION BUSINESSPETRONAS Malaysia

Entitlement

1,0841,079

Breakdown of PETRONAS Group Entitlement TOTAL PETRONAS GROUP 1,079 1,084 (0.5%)

Page 12

PETRONAS’ Oil and Gas Entitlement remains broadly unchanged amidst challenging cost environment

Crude CondensateGas

kbo

e/d

Note: Average Malaysia production entitlement of crude oil and gas by PETRONAS Group consists of PETRONAS’share including PETRONAS Carigali Sdn Bhd’s (PCSB’s) entitlement.

• PETRONAS Group entitlement for the period was 1,079 kboe/d or 67.8% of totalnational production.

Q1 FY10/11 PETRONAS Group entitlement was marginally lower by 0.5%:

1.1% lower PETRONAS entitlement; and 0.8% higher PETRONAS Carigali entitlement

Breakdown of Malaysia Production between PETRONAS Group and Other PSCs

Other PSCs

1,5871,592

PETRONAS (‘000 barrels of oil equivalent per day)Q1

FY10/11

Q1

FY09/10+/-

Crude Oil & Condensate 282 276 2.2%

Natural Gas 416 430 (3.3%)

TOTAL PETRONAS ENTITLEMENT 698 706 (1.1%)

PETRONAS Carigali (‘000 barrels of oil equivalent per day)Q1

FY10/11

Q1

FY09/10+/-

Crude Oil & Condensate 163 169 (3.6%)

Natural Gas 218 209 4.3%

TOTAL PETRONAS Carigali 381 378 0.8%

kbo

e/d

PETRONAS Group


International Summary

Indonesia15.4 kb/d (L)114.2 mmscf/d (G)

Mauritania3.8 kb/d (L)

Sudan158.5 kb/d (L)

Chad43.8 kb/d (L)

Turkmenistan6.1 kb/d (L)

Egypt 4.0 kb/d (L)674.4 mmscf/d (G)

JDA8.7 kb/d (L)566.2 mmscf/d (G)

Myanmar4.6 kb/d (L)180.8 mmscf/d (G)

Uzbekistan19.3 mmscf/d (G)

Vietnam11.6 kb/d (L)5.5 mmscf/d (G)

Pakistan6.9 mmscf/d (G)

Diversified operations in challenging environments

L : Condensate and Crude G : Gas Sales

Achievements Q1 FY10/11

Newly Acquired Blocks

• Venezuela:Carabobo 1 Norte & Carabobo 1 Centro (Project 1)

• Australia:WA402P & WA403P

• Uzbekistan: Baisun

1st Production • Sudan: Teng Mish Mish achieved 1st oil (6.0 kb/d)

HSE • Achieved 0.26 TRCF

Page 13Note: Exploration and development activities in 24 countries; Production in 11 countries

EXPLORATION & PRODUCTION BUSINESSInternational Total

Entitlement

133 115

138 165

84

Q1 FY10/11 Q1 FY09/10

International Entitlement

Top 5 Producing Countries in Q1 FY10/11

Crude CondensateGas

Page 14

284279

kbo

e/d

International entitlement is marginally lower for Q1 FY10/11 by 1.8%.

The lower oil entitlement was mainly due to expiry of service contract.

The higher gas entitlement is mainly due to higher production.

PETRONAS Carigali INTERNATIONAL ENTITLEMENT (‘000 barrels of oil equivalent per day)

Q1

FY10/11

Q1

FY09/10+/-

Crude Oil & Condensate 146 169 (13.6%)

Natural Gas 133 115 15.7%

PETRONAS Carigali INTERNATIONAL ENTITLEMENT 279 284 (1.8%)

CountriesEntitlement

(kboe/d)

PETRONAS Partners

Egypt 76 BG

Sudan 68 Sudapet, ONGC, CNPC

JDA 63 HESS

Chad 40 ExxonMobil, Chevron

Myanmar 20 MOGE, PTTEP, Nippon

Note: Includes Egypt’s natural gas entitlement of which the value is realized through LNG sales under the Gas & Power Business.

International Oil and Gas continues to be significant to the Group’s E&P portfolio

High grading E&P portfolio in order to enhance value amidst increasingly challenging environment

Page 15

Positioning towards the ‘New Reality’

Outlook

Increase in E&P activities driven by strengthening oil prices on the back of global economic recovery,spearheading CAPEX spending as IOCs and NOCs strive to sustain growth.

Conventional exploration areas are maturing, resulting in move to higher risks and frontier areas particularlydeepwater, high pressure high temperature (HPHT) and other unconventional plays.

• Higher cost of exploration and development due to escalation of material and service costs and increasinglycomplex development.

• Tougher operating environment due to increase in requirements for operating licenses and access to newacreages.

Positioning

High-grading E&P assets and active management of asset performance.

Focused efforts to efficiently grow reserves and maximise production through innovation and technologyincluding in the areas of Enhanced Oil Recovery, Improved Oil & Gas Recovery and unconventional plays.

Continuing efforts to optimise cost and monetise reserves timely and effectively.

Continuing to embed HSE best practices in our organisational culture.


Gas & Power Business

Datuk Anuar Ahmad


Gas & Power

Operational Highlights

GAS & POWER BUSINESS Consistent performance demonstrates Gas & Power Business’ resilience and ability to deliver value amidst challenging environment

Total average sales gas delivery for the quarter under review was higher by 1.2% as compared to the same period last year.

LNG sales volume for the group in Q1 FY10/11 stood at 5.82 million tonnes, 10.0% higher compared to 5.27 million tonnes recorded in same period last year.

PETRONAS Gas Berhad (PGB), continued to either meet or exceed world class operational standards, ensuring uninterrupted gas supply to the Group’s customers.

Since its commissioning in July 2009, the number of cargoes received by Dragon LNG as at 30th June 2010 stood at 24 cargoes with 38% sourced by PETGAS Trading (UK) Ltd, the Group’s European gas trading arm.

On May 28th 2010, Gladstone LNG became Australia’s first major coal bed methane to LNG project to receive its environmental approval from the Queensland Government.

Page 16

515 566

666 714

815 742

113 123

Q1 FY10/11 Q1 FY09/10

TNB IPP NON - POWER EXPORT

Note: TNB = Tenaga Nasional Berhad , IPP = Independent Power ProducersGPP = Gas Processing Plant , PGU = Peninsular Gas Utilisation

Average sales gas volume for Q1 FY10/11 was 2,611 mmscfd, marginally higher by1.2% compared to same period last year.

Total 2,109 mmscfd was delivered by PGU system, of which: 1,181 mmscfd were consumed by customers in the power sector; 815 mmscfd were delivered to non-power customers; and 113 mmscfd were exported to Singapore.

The Group sourced 610 mmscfd of gas from Indonesia and Malaysia-Thailand JointDevelopment Area (MTJDA) to supplement gas supply from offshore Terengganu.

PETRONAS Gas Berhad (PGB), the Group’s gas processing and transmission arm, whichoperates the GPP and PGU pipelines, continues to sustain world class operationalstandards.

GPP and PGU System Efficiency: Maintaining World Class Level

PGU Sales Gas Delivery

Ensuring continuous gas supply in support of the nation’s economy

Page 17

GAS & POWER BUSINESS Operational Highlights

Gas

mm

scfd

2,1452,109

Q1 FY10/11 Q1 FY09/10 +/-

AVERAGE SALES GAS VOLUME (in mmscfd)Peninsular Malaysia (PGU)SarawakSabah & Labuan

2,6112,109274228

2,5802,145250185

1.2%(1.7%)9.6%

23.1%

PGU SYSTEM SUPPLY SOURCES (in mmscfd)Offshore TerengganuIndonesia & MTJDA

2,1091,499610

2,1451,682463

(1.7%)(10.9%)31.7%

Reliability Level Attained in Q1 FY10/11 (%)

GPP 99.90

PGU 99.99

5.444.83

0.38

0.44

Q1 FY10/11 Q1 FY09/10

Mill

ion

to

nn

es

PETRONAS LNG Complex Egyptian LNG Operation

Higher LNG sales volume to Long-Term Customers

PETRONAS LNG COMPLEX SALES

ALTCO Volume Handled

LNG Production Volume

5.44 Million tonnes

Page 18

Operational HighlightsLNG

5.82

5.27

The Group’s total LNG sales Q1 FY10/11 was marginally higher compared to same period last year at 5.82 million tonnes and mainly reflects higher sales from PETRONAS LNG Complex in Bintulu.

Exports of LNG from Bintulu were shipped mainly to Japan at 60%, Taiwan at 16% and South Korea at 15%.

The Group‘s LNG trading arm, ASEAN LNG Trading Company (ALTCO) plays its role as system balancer for this quarter by handling 7 cargoes.

60%16%

15%

7%2%

Japan Taiwan S. Korea China Others

Q1FY10/11

Q1 FY09/10

Volume (Million tonnes)

0.42 0.48

No. of Cargoes 7 8

Q1 FY10/11

GAS & POWER BUSINESS

Positioning for Sustainability

Outlook

• LNG demand is projected to remain positive.

• In the short term, there is still oversupply in the LNG market, however there are indicators that LNG demand is growing stronger than previously anticipated that may lead to market re-balancing earlier than 2015.

• LNG prices are projected to be robust in the near term and gas pricing to remain non-uniform based on geographical market dynamics such as liquidity and regulatory factors.

• Continued reliance on gas imports to ensure long term gas supply and sustainability to Peninsular Malaysia gas markets.

Positioning

• Strengthen and diversify supply position by acquiring sought after volumes from increasing number of LNG projectsand spot volumes. Grow LNG position in selective opportunities such as Coal Bed Methane (CBM) & Floating LNG(FLNG).

• Continues to leverage on long term contracts with Far Eastern customers as well as seizing opportunities from therobust spot market.

• Domestically PETRONAS is undertaking several measures in ensuring long-term security of supply for the nationincluding the proposed construction of new LNG terminal in Peninsular Malaysia.

Continues to strive towards operational excellence and growth amidst the opportunities and challenges

GAS & POWER BUSINESS

Downstream BusinessDatuk Wan Zulkiflee Wan Ariffin


Downstream

DOWNSTREAM BUSINESS

Downstream Operations

Page 20

Downstream business consists of 3major sectors:

Downstream Marketing;

Refining & Trading; and

Petrochemicals Business.

Downstream marketing segments:

Retail;

Commercial;

Lubricants;

Liquified Petroleum Gas (LPG); and

Aviation.

Refining & Trading:

Malaysia: 3 refineries

South Africa: 1 refinery

Petrochemicals Business is fully integrated from production plants to marketing of petrochemical products:

Plants:

o Malaysia: 18

o Vietnam: 1

Product Markets:

o Malaysia

o Regional

Downstream Business plays a strategic role in adding value to our oil and gas resources

Denotes presence in the form of Subsidiaries and Associates

DOWNSTREAM BUSINESSHigher sales volume achieved on the back of improved global market conditions

18.0

10.8 8.3

16.8

11.0

7.5

Retail Commercial Others

Q1 FY10/11 Q1 FY09/10

Operational HighlightsDownstream Marketing

o Overall sales volume improved by 5.1% due to continued strong performance from subsidiaries and affiliates, in line with global demand recovery.

o The Retail segment which is led by PETRONAS Dagangan Berhad (PDB) in Malaysia, and EngenLimited in South Africa, collectively delivered 7.1% volume improvement on a y-o-y basis.

Sales Volume by Segment (in Million bbl)

37.1 Million bbl

Sales Volume by Company

Q1 FY09/10Q1 FY10/11

35.3 Million bbl

PDB ENGEN Others

20.6 19.5

12.8 12.0

3.83.7

Note : Others includes Lubricants, Aviation & LPG

Note : Others include the PETRONAS Lubricants Group and international marketing affiliates worldwide. Page 21

82.188.6

Q1 FY10/11 Q1 FY09/10

DOWNSTREAM BUSINESSSustaining operational excellence whilst optimising production economics

Operational HighlightsRefining

40.543.8

Q1 FY10/11 Q1 FY09/10

Page 22

Refinery Utilisation (%)

Total Production Volume (in Million bbl)

Refinery utilisationwas marginally lower against same period last year, as PETRONAS PenapisanTerengganu Sdn. Bhd. (PPTSB) had a scheduled turnaround during Q1 FY10/11.

Despite lower refinery utilisation, total production volume of 40.5 million bbl was able to support the Group’s requirement. Q1

FY09/10Q1

FY10/11

Q1FY09/10

Q1FY10/11

Petrochemical plants maintained the momentum in operational excellence to deliver sustainable value creation.

Plant Utilisationimproved from 79.1% to 83.1% on the back of higher demand particularly from China and India, following recovery in global market conditions.

DOWNSTREAM BUSINESSImproved production volumes and plant utilisation following recovering market conditions

Operational HighlightsPetrochemicals

1,641

1,506

Q1 FY10/11 Q1 FY09/10

83.179.1

Q1 FY10/11 Q1 FY09/10

Page 23

Plant Utilisation (%)

Petrochemicals Sales Volume (in Thousand MT)

Q1FY09/10

Q1FY10/11

Q1FY09/10

Q1FY10/11

Maximising opportunities amidst an increasingly challenging environment

Positioning For Growth

DOWNSTREAM BUSINESS

Page 24

Outlook

Refining

Refining margins are expected to seasonally trend lower in the coming months as: Northern Hemisphere markets transition from the summer driving season (higher gasoline

demand) to heating demand season (higher Fuel Oil). New capacity added from refinery start ups in the Middle East and Asia Pacific as well as capacity

from existing refineries coming out of recent turnarounds.

• The weak margin environment will continue to strain the least competitive refining assets, particularlyhydroskimming and small scale refineries.

Petrochemicals

• Long term demand for petrochemical products will be driven by rising industrial activity, income percapita, especially among Emerging Economies. Accordingly, petrochemicals production will shifttowards Asia Pacific and Middle East.

Positioning

Realignment of the Downstream businesses into focused sectors (e.g. Downstream Marketing, Refining &Trading and Petrochemicals) will better position PETRONAS for future growth.

Review of our business portfolio to enhance our strategic competitiveness.

Industry Overview


Q&A

Industry Overview


Thank You

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