Now what I didn't understand was Datuk Shamsul's plans (medium to long term?) for Petronas. Quoting from The Star's report,"Petroliam Nasional Bhd (Petronas) will search for more oil and gas reserves in Malaysia at the expense of overseas exploration and has changed its management structure to have its executive vice-presidents in charge of key operations to shoulder more responsibility. Domestic oil exploration would see Petronas drill deeper for oil and gas on the shallow waters of Malaysia but the company is also looking to increase the amount of oil it pumps out from existing wells in Malaysia."
Petronas' operations were mainly focused on Malaysian shores resources - East and West Malaysia - in the initial stages.Tan Sri Hassan Marican transformed Petronas rapidly into a global company with oil explorations and business joint ventures with overseas partners.
Approximately 49% of Petronas revenue came from overseas operations under Tan Sri Hassan Marican's leadership.
Now, Datuk Shamsul is saying that Petronas will search for more oil and gas reserves in Malaysia at the expense of overseas exploration.
Clearly, what is in Malaysia belongs to the Malaysian Government since we are a sovereign nation.
And based on Malaysian legislation, Petronas is the sole custodian on behalf of the Government for all oil and gas reserves in Malaysia.
No one has a right to take it, unless some smart leader gives or trades the oil field for something else with another country.
When oil and gas head towards scarcity, by the law of economics, oil and gas prices will go up. No practical alternative energy is available at the moment for oil and gas also.
The oil and gas fields in Malaysia remains a "secure revenue" for Petronas and the Malaysian Government in the long run.
So, it makes little sense to search for more oil and gas reserves in Malaysia at the expense of overseas exploration.
Petronas should continue to explore oil and gas fields overseas with the appropriate risk assessments considered.
Revenue should be generated from oil reserves that belong to other countries first as long as it is profitable even though the contractual bids and exploration incur substantial costs.
If the opportunity is there overseas, why not attempt to grab it ? The "secure revenue" at home won't run away and will stay miles under the sea bed.
Rockybru has a brief summary of what Datuk Shamsul Azhar Abbas, the hot man favored by the Prime Minister over Tan Sri Hassan Marican, in his "meet the Editors" session recently.
You can read it here : We won't sell KLCC
What a joke man, why not just say, as a petronas CEO i afraid and no 010 to explorer other country oil reserve.
ReplyDeleteas that i resign and become CEO of Dapur
10Q KJ
Malaysia sepatutnya menumpukan kepada penyelidikan kereta menggunakan tenaga solar atau elektrik memandangkan hasil minyak Malaysia bukan untuk selama-lamanya.
ReplyDeleteBiarlah Malaysia menjadi pelopor dan mengeluarkan kereta menggunakan tenaga alternatif yang murah tetapi berkualiti.
Wei Liang,
ReplyDeleteI have confident in Shamsul professionalism in managing Petronas. New leadership possess different style and ideas that will bring Petronas in greater height.
Revenue does not guaranteed good profit margin, bear in mind oversea venture come with higher risk due to fluid socio-political condition and Petronas is operating in these thigh risk geographical area. A nation must have military might to operating in these areas.
Shamsul must have these in mind after years of involvement Petronas management, in fact the decision focus on local potential oilfield may be the results of some losses sustain in overseas. You see all our conglomerates venture to overseas incured heavy lost in Middle East such as Gamuda, UEM, Sime Darby and others. All heavy losses.
Kelvin
SJ
All will melt down to competetiveness.... I would say this is a backward strategy taken by Shamsul agains all the mainstream oil giant except for Russia and China where their country is sooo big with un-known potential to be tap...
ReplyDeleteEven ExxonMobil venture globally... Can BP or Shell prosper just by relying to their home bound reserve... In short no body can become big by becoming Jaguh Kampung... it defies all the logics... Whats got into the mind of all the BODs,
Well there is actually a perfectly valid reason to pursue oil exploration within Malaysia: oil royalties.
ReplyDeletePetronas does not pay oil royalties for oil found outside Malaysian territorial waters. Any money made by Petronas overseas will only return to Malaysia via tax on Petronas profits. And bear in mind, Petronas probably has to pay tax in the country it is operating in, possibly oil royalties to that country in question as well.
Therefore, by increasing oil production of local oil fields, the Malaysian government will be able to rake in more revenue via the 10% oil royalties.
This is probably one idea on how to reduce our country's ballooning deficit, else we will be bankrupt in 9 years.