The recovery in Asia's demand for oil remains fragile despite the reopening of economies across the region, as a second wave of coronavirus outbreaks could hit consumption again, the outgoing head of Malaysia's Petronas said.
"We really had a collapse these past few months, but are seeing signs of opening up of the economies," Petronas' CEO Wan Zulkiflee Wan Ariffin said in a conversation with IHS Markit's Daniel Yergin on Monday.
"But ... the recovery is fragile," he said, in what is likely his last interview as head of one of Southeast Asia's largest energy majors.
Energy affordability has become a priority for many governments, Wan Zulkiflee said, as the pandemic cut disposable incomes.
"When demand collapsed, our inventories were coming up, logistics were affected, customers were not taking products and essentially, we had issues on all fronts," he said.
"This is also when we adopted the philosophy of 'you produce only what you can sell'."
Petronas cut crude and LNG exports in second quarter.
The company is exploring ways to adapt to the "new normal", said Wan Zulkiflee who is stepping down at the end of June.
"Some changes are here to stay. The way customers will behave in the future will be very different, and also the way the workforce, our staff, expectations of the workforce, will be very different as compared to before this crisis," he said.
The increase in online interaction as a result of the crisis could change the future leadership attributes required by the company's staff, 55% of whom are now under 35, he said.
In the long run, oil and gas will remain the dominant contributors to its energy mix, although Petronas is stepping up renewables and specialty chemicals investments.
"In this part of the world we cannot run away from solar," he said. Petronas has allocated about 7% of its 2020 capital expenditure in renewables. (Reporting by Florence Tan; Editing by Simon Cameron-Moore)
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