Petronas posted a 34 percent decline in third-quarter profit on Monday, saying the fall was mainly due to a one-off gain in 2010 from the listing of subsidiaries.
Without that gain, Petronas' Q3 profit was higher than a year ago on the back of higher crude oil prices and improved margins, it said.
The unlisted firm said its net profit for the nine-month period ended Dec 31, 2011 was 10.6 percent higher than a year ago at 55.57 billion ringgit ($18.5 billion) due to higher crude oil prices, sales and gas production volume.
Revenue in the nine months rose 26.9 percent to 222.79 billion ringgit year on year.
The company warned of a challenging outlook ahead on lower expected crude production and weaker prices on the back of the protracted European sovereign debt crisis.
"Growth in 2012 and 2013 will be not be as strong as we have seen last year as the current crude oil prices won't last long. It is hurting the economy," Petronas' president and CEO Shamsul Azhar Abbas told reporters.
He said crude oil prices are expected to hover between $85 to $90 per barrel this year, compare to around $110 now.
Shamsul said the company's crude production was expected to be lower this year due to natural depletion.
"Challenge remains in production," he told reporters, adding that the political uncertainties in Middle Eastern were adding to the challenging outlook. Petronas' oil production declined four percent last year.
Petronas is facing depleting oil and gas reserves in Malaysia and has stepped up its deep-water exploratory activities as well as re-exploring marginal fields.
Petronas' oil production in South Sudan, which amounted to some 135,000 barrels a day or 18 percent of its total production, has ceased due to a row between Sudan and South Sudan over oil transit fees, said Shamsul.
"It's a severe reduction and we have no idea of when we will be able to get back the 135,000 barrels a day," he told reporters. "But it will be partially offset by our other production in other countries."
Petronas is part of Chinese-Malaysian oil firm Petrodar. South Sudan said in February it had expelled the head of Petrodar, which is the main oil firm in the country, after accusing Chinese firms of helping Sudan to seize the southern oil.
Oil from Sudan accounts for about 20 to 30 percent of Petronas' international oil production, making it the single largest contributor.
According to Petronas' official website, its presence in the Republic of South Sudan is via its 20 percent interest in Greater Nile Petroleum Operating Company Ltd, 40 percent in Petrodar Operating Company and 67.87 percent White Nile Petroleum Operating Company Ltd
Petronas' partners are China National Petroleum Corporation, Oil and Natural Gas Corporation, China Petroleum & Chemical Corporation and Tri-Ocean Energy.
