by YB Dato Abdul Rahman Dahlan
Since the mechanics of bringing about the formation of PETRONAS and the very validity of the Petroleum Development Act vesting all the States' petroleum resources in PETRONAS may itself be questioned, it is high time to look seriously at this usurpation of state resources by the Federal government under the pretext of bringing about the economic development of the poorer States.
Where there is a will there is a way.
There is certainly no excuse for not redressing the balance in favour of the poorer States of Malaysia whose rich petroleum resources have been literally stolen by an avaricious Federal government.
While certainly the petroleum business is not for the Average Joe, the risks are not as great as the companies and the government would like us to imagine. The reason that such companies have bottomless bank accounts is the fact that they are making enormous PROFITS from the petroleum business.
7 of the top 15 most profitable companies in the world for 2011 (including PETRONAS by the way) are oil companies. See the full list here. No. 1 was Gazprom, which made US44.5 billion in 2011 and No. 2 was Exxon Mobil, which made US41 billion.
The fact that PETRONAS has been able to contribute huge revenues to the Federal government, even amounting to 40% of the national budget, much of it extravagantly misspent, wasted and unaccounted for, also shows the fallacy of this statement.
There is actually no need to let your imagination run wild and the black gold is not as elusive as the writer would have us believe. No oil company would spend hundreds of millions on exploration drilling without a high probability of finding oil and/or gas. There are preliminary geological, seismic and other surveys that are done first to maximise the probability of finding oil when the exploration drilling phase starts. Expenses are also usually capped to avoid waste.
The fact is that even if hundreds of millions are spent on exploration drilling in any particular area, which is not normally the case, any oil strike would be potentially worth billions and render these expenses immaterial.
This is simply not true. PETRONAS's deposits in Malaysian banks alone keep the Malaysian financial system afloat. PETRONAS is ranked 12
This is another blatant lie that PETRONAS itself would probably refute. The fact is that the UMNO regime has even used PETRONAS illegally as a lender of last resort (which is supposed to be the Central Bank's role) in bailing out entities such as Bank Bumiputra and MAS and to bankroll the construction of Putrajaya, thereby putting it at even greater financial risk.
Another lie. PETRONAS is a multinational and operates in many other countries around the world very profitably. This is what PETRONAS says on its website:
"PETRONAS has come a long way from managing the work of foreign production sharing contractors. We have evolved our own upstream capabilities and ventured into the entire spectrum of downstream activities to add value to our petroleum resources.
With our strategy of integration, adding value and globalisation, PETRONAS continues to deliver excellence towards realising our vision of becoming a leading oil and gas multinational of choice."
Also from its website:
- "Malaysia’s hydrocarbon reserves stand at 20.56 billion barrels of oil equivalent (boe) with an average production of 1.63 million boe per day.
- PETRONAS’ total hydrocarbon reserves stand at 27.12 billion boe with an average production of 1.1 million boe per day.
- International reserves in Africa, Southeast Asia, the Middle East and Central Asia stand at 6.56 billion boe, comprising nearly a quarter of PETRONAS’ total reserves.
- PETRONAS achieved a Reserves Replacement Ratio of 1.1 times in Malaysia and 4.1 times internationally, comparable with the industry average.
- Malaysia's first deepwater field, Kikeh, employing the first Truss Spar floating production unit outside the Gulf of Mexico came onstream in August 2007. The project achieved world-class performance with only five years elapsing between discovery and production."
Who is the writer trying to kid, and why is he downplaying PETRONAS's capabilities?
Rubbish! This is a gross over-exaggeration. See the following source:
"The International Energy Agency (IEA) -- in its latest November 2008 world energy outlook -- gave the following estimates for the all-in costs of producing oil from various types of hydrocarbons in different parts of the world:
Oilfields Estimated Production /source Costs ($ 2008) Mideast/N.Africa oilfields 6 - 28 Other conventional oilfields 6 - 39 CO2 enhanced oil recovery 30 - 80 Deep/ultra-deep-water oilfields 32 - 65 Enhanced oil recovery 32 - 82 Arctic oilfields 32 - 100 Heavy oil/bitumen 32 - 68 Oil shales 52 - 113 Gas to liquids 38 - 113 Coal to liquids 60 - 113 Source: International Energy Agency World Energy Outlook 2008"(emphasis added).
The FACT is that PETRONAS's own subsidiary, CARIGALI, does exploration and oil production for PETRONAS, not just in Malaysia but in other countries around the world such as Vietnam and Sudan. As its own website says:
"Globally, PETRONAS has exploration and production presence in over 22 countries in Southeast Asia, the Middle East, Central Asia, Latin America and Africa. These overseas ventures account for almost a quarter of our total oil and gas reserves."
This 15% increase would actually mean RM3.2 billion for Sabah, Sarawak RM8.3 billion & Terengganu RM9.3 billion, or a total of RM20.8 billion which is approximately 30% of Petronas's profit for 2011.