Analyst tells Sarawak, Petronas to go for progressive tax

June 8, 2020

Dateline 2020-05-13, FMT:

An oil and gas analyst has proposed that Sarawak levy a form of progressive sales tax on Petronas instead of fixing the rate at a flat 5%.

Renato Lima de Olivera, an assistant professor at the Asia School of Business, said this would ensure that the state remain attractive for new investments in exploration and production of petroleum.

“If taxes are deemed too high and regressive, then there is no incentive to invest in finding and developing new oil and gas fields,” he said. “A progressive tax structure will mitigate this.

“Otherwise, what you will see is higher taxes from current fields, but these fields will eventually deplete by the natural extraction process.”

Rastam Hadi, ‘visionary’ first MD of Petronas, dies

May 24, 2020

Dateline 2020-05-09, FMT:

Rastam Hadi, the first employee of Petronas and also its first managing director, died today two weeks short of his 89th birthday.

He was described as a visionary and a nationalist.

His daughter, lawyer and composer Saidah Rastam, said he died at 3.20am at her home in Bukit Tunku, Kuala Lumpur. He was buried at Bukit Kiara cemetery this afternoon.

Rastam was managing director of the national oil and gas company from 1974 to 1987, and also served as the company’s senior vice-president (upstream sector) from 1987 to 1989.

Malaysia’s Petronas drops legal action against Sarawak, to pay $462 million sales tax

May 23, 2020

Dateline 2020-05-08, Reuters:

Malaysian national oil firm Petronas has agreed to withdraw legal proceedings against Sarawak state and make full payment of a sales tax imposed by the state government on petroleum products for 2019 of 2 billion ringgit ($462 million), at 5% of the value of products, Petronas said in a statement on Friday.

Petronas agreed to withdraw an appeal of the Sarawak High Court’s decision on the application for a judicial review in March, while Sarawak will also drop all civil litigation against Petronas for payment of sales tax on petroleum products, the statement added.

Beijing harasses Petronas and Shell off Malaysia

May 22, 2020

Dateline 2020-04-24, Energy Voice:

A four-month long standoff over oil and gas operations in the South China Sea is intensifying between Malaysian, Chinese, and Vietnamese ships, though all three governments have managed to keep it out of the public eye, until very recently.

At issue are two oil and gas fields that Malaysia’s state-owned Petronas is exploring on the extended continental shelf claimed by both Kuala Lumpur and Hanoi. In mid-April, the face off drew in US and Australian war ships, heightening tensions in the area, where IOCs, such as Shell, also have stakes in oil and gas projects.

Oil royalties for Sabah and Sarawak: Dead on arrival

May 21, 2020

Dateline 2020-04-25, FMT:

Brent crude oil prices dipping below US$30 and US oil prices turning negative for the first time in history is bad news for Sabah and Sarawak, which are dependent on oil royalties as a major source of revenue.

Analysts predict the depressed oil price will continue in the short and middle term as demand continues to fall. Oil producers like Petronas facing a glut market are riding in uncharted deep waters as Covid-19 batters the world oil markets.

For Sabah, petroleum royalty remains the highest contributor to the state coffers. For 2020, the total projected revenue from oil is RM1.7 billion. Oil royalty accounts for 40.55% of the state revenue. This estimate is based on royalty payment received from Petronas in 2019 amounting to RM1,703.5 million, the highest amount received since the Petroleum Development Act 1974 was passed.

Petrol dealers fear dry pumps when MCO ends

May 20, 2020

Dateline 2020-04-18, FMT:

The country’s largest organisation of petrol station owners has warned of the likelihood of pumps running dry after the movement control order (MCO) expires unless the government temporarily stops the practice of setting weekly prices.

Many of the station owners would not have the funds to buy enough petrol and diesel to cater to the expected increase in demand, Petrol Dealers Association Malaysia (PDAM) president Khairul Annuar Abdul Aziz told FMT.

He said the drop in fuel prices and a 70% reduction in sales since the MCO had badly affected petrol dealers.

Malaysia’s pledge to cut oil production is bigger than expected: PublicInvest

May 19, 2020

Dateline 2020-04-17, NST:

Malaysia’s pledge to cut oil production by 136,000 barrels per day (bpd) in May and June is bigger than expected.

Public Investment Bank Bhd said this was almost seven to nine-fold of the country’s previous cuts of about 15,000 to 20,000 bpd.

This, PublicInvest added, might hurt the mining and quarrying sector sectors especially when the cut for OPEC+ hits it tipping point in May and June.

“This may hit the mining sector in the Industrial Production Index and mining and quarrying sector in gross domestic product (GDP) output especially in the second quarter of the year when the cut for OPEC+ hits its tipping point,” the firm said today.

China And Malaysia Clash In Highly Disputed South China Sea

May 18, 2020

Dateline 2020-04-17, Oil Price:

Tensions are rising in the disputed South China Sea, where a Chinese survey vessel has been tagging an exploration ship which Malaysia’s state oil firm Petronas is operating in the area, security sources in the region told Reuters on Friday.

The long-running dispute in the South China Sea involves territorial claims by China as well as Vietnam, the Philippines, Taiwan, Brunei, and Malaysia. China has territorial claims to about 90 percent of the South China Sea, which has put it at odds with its neighbors.

The Chinese research and survey vessel Haiyang Dizhi 8 was close to Malaysian waters, and at one point on Friday, the Chinese ship was flanked by Chinese ships of the coast guard and maritime militia, according to Reuters’ sources. The Haiyang Dizhi 8 ship was close to the West Capella exploration vessel operated by Petronas.

Petrol dealers association seeks to close some kiosks during MCO

May 17, 2020

Do any kiosks actually close every time BUMIPEDA threaten to do it?

Dateline 2020-04-17, Malaysian Reserve:

PETROL pump operators are looking to halve the number of stations that are open during the Movement Control Order (MCO) to cut losses as motorists stay home going into the fifth week of travel restrictions.

Petrol pumps are considered essential services and must remain open under instructions from the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP), but dealers are asking that some locations be allowed to stop business until the MCO is revoked because there is no demand at the moment.

Bumiputera Petrol Dealers Association of Malaysia (Bumipeda) president Datuk Abu Samah Bachik said the public can be serviced even if half the number of stations are allowed to shut during the MCO.

Even with the drop in oil prices, the demand for fuel has dried up as only essential travel is allowed since March 18 and will be enforced at least until April 28. Globally, the benchmark Brent crude dropped 5% on Wednesday to US$28 (RM121.80) a barrel, as demand drops to a 25-year low.

Malaysia: Oil tanker ‘MT Wan Da’ sinks off the coast of Johor; oil spill reported

May 16, 2020

Dateline 2020-04-16, Manifold Times:

The Johor-Bahru division of Malaysia Maritime Rescue Sub Centre (MRSC) on Wednesday (15 April) reported the sinking of oil tanker MT Wan Da near Tanjung Penyusop in its initial investigations.

According to MRSC, the head office in Johor Bahru was first made aware of the incident from the Head of Tanjung Pengelih Maritime Zone who received a request from a shipping and forwarding company to carry out salvaging works on the vessel.

Rescue vessel Petir 11 of Tanjung Sedili Maritime Zone was on patrol at about 2.20 pm when it discovered an overturned vessel about 2.7 nautical miles off Tanjung Penyusop.