KINIBIZ It looks like that the oil crisis is biting Malaysia’s energy giant Petronas harder than it thought it would.

Last week, during its financial results announcement for second quarter of financial year 2015 (2Q15), chief executive officer (CEO) Wan Zulkiflee Wan Ariffin admitted that the company is having cash flow problems that will force Petronas to dip into its RM126 billion cash reserves.

Could it be the final straw that breaks the camel’s back for Petronas’ controversial US$30 billion (RM123 billion) liquefied natural gas (LNG) venture in Canada?

“I do not expect our cash flow from operations this year to meet our capital expenditure and dividend commitments. We will have to draw on our cash reserves,” said Wan Zulkiflee.

The numbers are indeed very alarming and things are not expected to improve any time soon.

Petronas’ profit after tax for 2Q15 is down 47 percent year-on-year. Cash flow from operating activities in 2Q15 fell 33 percent.

Since Brent crude oil prices started sliding in the middle of last year from highs of over US$100 per barrel to just under the US$50 mark last week, the price rebound that many had hoped for has not happened just yet.

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This article was written by Khairul Khalid.