48 Management Discussion And Analysis / Business Review DAGANG NeXCHANGE BERHAD Integrated Report 2024 BUSINESS REVIEW Regulatory Pressure in the United Kingdom Risk Description The revision of the United Kingdom EPL policy, including a proposed tax rate increase and removal of investment incentives, has made continued investment in the region more challenging. Mitigation We are rebalancing our portfolio to prioritise Malaysian assets, where the regulatory environment is more stable and offers better operational and financial predictability. At the same time, we continue to advocate for a more progressive and predictable tax regime through active industry engagement in the United Kingdom. Oil Price Volatility Risk Description While prices remained relatively firm during the year, oil markets are inherently exposed to global demand fluctuations and geopolitical risks. Mitigation We continue to manage this exposure through a productivitydriven budgeting approach and disciplined capital management. Cost structures are kept lean, with unit operational expenditure (“OPEX”) maintained at approximately USD27 per barrel and unit capital expenditure (“CAPEX”) at around USD12 per barrel, supporting more flexible, return-focused planning. Operational Disruptions Risk Description In FY2024, Ping faced multiple production challenges, including unplanned shutdowns and technical delays, which increased unit operating costs and reduced output. Mitigation We are improving maintenance planning to proactively address potential issues while strengthening technical oversight to ensure faster response times. Additionally, we are applying phased development strategies that allow for quicker adaptation to operational constraints, minimising downtime and reducing the impact of production delays. Risks and Mitigation The Energy Business Segment operates in a highly regulated and volatile environment, where external factors such as policy shifts, commodity pricing and operational reliability can significantly impact performance. In FY2024, several key risks continued to shape our strategic priorities.
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