DIVERSE DEVELOPMENTS AMIDST CHALLENGING CONDITIONS Global economic activity remained subdued in 2015 even as growth in emerging markets and developing economies declined for the fifth consecutive year while the advanced economies registered modest growth. Global economic progress continued to be hampered by several factors including the persistent slowdown and rebalancing of economic activity in China that saw an easing away from investment and manufacturing ac t i v i t i es and a move t owa rds consumption and services. The gradual tightening of monetary policy in the United States (US) amidst resilient economic recovery also influenced global growth even as other major advanced economy central banks continued to ease monetary policy. On top of this, global growth continued to be adversely impacted by lower prices for energy and other commodities. The relentless plunge in crude oil prices con t i nued t o send shockwaves throughout the globe in 2015. This was primarily the result of a marked slowdown in demand growth and record increases in supply, particularly tight oil from North America. It was also due to the decision by the Organisation of Petroleum Exporting Countries (OPEC) to avoid rebalancing the market through output reductions. Following a period of relatively stable but historically high prices from 2010 until mid-2014 (at which point oil traded a t a round USD115 pe r ba r re l ) , international benchmark oil prices fell by more than 50% in 2015 and remained in the USD40 to USD60 per barrel range for much of the year. Dear Shareholders, I am delighted to report that MISC turned in a commendable performance on the financial and operational fronts in the year under review. While 2015 brought with it a continuing low oil price environment that forced Oil & Gas companies the world over to realign their operations for survival’s sake, MISC leveraged on these conditions and several effective strategies, to deliver a sound performance. By December 2015, the markets were routed as unrelenting oversupply, swollen inventories and a torrent of negative economic news pressured prices, so that by mid-January 2016, crude oil hit twelve-year lows with both ICE Brent and NYMEX WTI plummeting below USD30 per barrel. As expected, given the highly challenging operating environment, Oil & Gas players continued to take sweeping measures to safeguard their operations by significantly reducing headcount as well as operational and capital expenditure. MISC BERHAD Annual Report 2015 53
RkJQdWJsaXNoZXIy NDgzMzc=