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.

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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.

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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.

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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.

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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.

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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.

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Malaysia’s Petronas warns of project delays, aims to keep local capex

May 15, 2020

Dateline 2020-04-14, Yahoo:

Malaysian state energy giant Petronas said the risks of delays to some of its projects were rising due to prolonged coronavirus-related lockdowns around the world.

Petronas, which operates in more than 20 countries including Brazil and the United States, said in an email that it would try to maintain its domestic spending for this year.

The company forecast 2020 domestic capital expenditure of 26 billion ringgit ($6 billion) to 28 billion ringgit, higher than last year.

“The ongoing global spread of the COVID-19 outbreak and collapse in oil prices continue to impact financial markets as well as many economies and industries around the world,” Petronas said in an emailed statement on Monday.

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Malaysian senator builds solar-powered buggy while under home quarantine for COVID-19

May 14, 2020

Dateline 2020-04-13, Channel News Asia:

Stuck in a 14-day home quarantine, rural empowerment activist Adrian Banie Lasimbang decided to take advantage of the enforced isolation and come up with a working prototype of a solar-powered, electric buggy in the past two weeks.

The 43-year-old, who is also a senator from Sabah in the Dewan Negara (the Malaysian Parliament’s upper house), told CNA he was quarantined from Mar 23 till Apr 5 after coming into contact with a friend who later tested positive for COVID-19.

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After Sarawak, Sabah starts imposing petroleum sales tax

May 13, 2020

Dateline  2020-04-07, Malay Mail:

Sabah has implemented a 5 per cent sales tax on petroleum products sold in its territory, said Chief Minister Datuk Seri Mohd Shafie Apdal.

He said he informed petroleum companies of the state’s decision to collect the tax last month and it should come into effect immediately.

“We’ve done it already, last month,” he said when asked what was Sabah’s plan to impose the tax.

This comes after the High Court ruled last month that Sabah and Sarawak have the right under the Federal Constitution to impose a sales tax on petroleum products.

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Petronas contractor off Malaysia confirmed with Covid-19

May 12, 2020

Dateline 2020-04-06, Upstream:

A worker off Malaysia has tested positive for Covid-19, the second such confirmed case in Southeast Asia’s second-largest oil producer.

“Petronas, through its subsidiary, Petronas Carigali, confirms that one of its contractors at an offshore platform in Miri, Sarawak has tested positive for Covid-19. The contractor is currently receiving treatment at a government hospital,” Petronas told Upstream on Monday.

A contractor source claimed that the worker in question was a rig crew member on Velesto Drilling’s jack-up Naga 6.

As a result of his diagnosis, work has been temporarily stopped at Petronas Carigali’s Tukau Timur (East Tukau) and Baronia fields’ infill drilling programmes.

“As a precautionary measure to manage the risk of exposure, we have temporarily locked down the rig and suspended all crew change. All identified close contacts have immediately been placed under quarantine for 14 days,” said Petronas.

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