Exclusive: Malaysian energy giant’s board at odds with PM over payment to Sarawak state

September 2, 2020

Dateline 2020-06-26, KFGO:

The board and management of Malaysian national energy giant Petronas have urged the prime minister to drop a planned tax settlement with a state that is run by his political allies, three sources close to the company said.

Petronas’ chief executive, Wan Zulkiflee Wan Ariffin, resigned in opposition to the deal, sources told Reuters last week, and he is set to leave the company this month after 37 years.

But, sources told Reuters the rest of the management were still trying to convince Prime Minister Muhyiddin Yassin to block the pay-out to Sarawak, a resource rich state on Borneo island.

Muhyiddin’s decision will have big implications for Petronas and the national budget, and will be closely watched by foreign investors, on guard over corporate governance and financial transparency in Malaysia following the mega-scandal at sovereign fund, 1Malaysia Development Bhd (1MDB).

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Oil, gas woes hamper Muhyiddin’s economic recovery plans for Malaysia

September 1, 2020

Dateline 2020-06-23, Phnom Penh Post:


Petronas’ woes mean it may not be able to help bail Malaysia out of its financial tight spots this time. AFP

Plunging oil and gas prices are set to further hammer Malaysia’s economy, as state oil firm Petroliam Nasional Bhd (Petronas) faces depressed demand due to global coronavirus lockdowns.

Petronas’ woes mean it may not be able to help bail the country out of its financial tight spots this time.

Falling oil and gas prices are a double whammy for Malaysia’s economy as the Muhyiddin Yassin administration wrestles with the fallout from the Covid-19 pandemic.

Unemployment hit a three-decade high of five per cent in April. Malaysia posted a trade deficit in the same month for the first time since the 1997 Asian financial crisis, with mining exports (largely made up of crude oil and natural gas) suffering their steepest plunge at 31.5 per cent, far more than the 23.8 per cent overall.

The Manila-based Asian Development Bank last Thursday said it expected the Malaysian economy to shrink by four per cent, while British multinational financial services company Barclays Plc had, a day earlier, forecast a whopping 8.5 per cent drop.

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Sarawak CM claims Petronas told to withdraw court appeal against paying sales tax

July 8, 2020

Dateline 2020-06-12, Malay Mail:

Putrajaya has directed national oil company Petronas not to proceed with its appeal after losing a court case and being ordered to pay Sarawak the sales tax amounting to RM2.8 billion, Chief Minister Datuk Abang Johari Openg said today.

He said Petronas had filed an appeal of the High Court’s decision on the application for a judicial review against the imposition of the Sarawak Sales Tax on the import of petroleum products before the change of the federal government from Pakatan Harapan (PH) to Perikatan Nasional (PN).

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Petronas CEO to Leave for Role at Malaysia Airlines

July 1, 2020

Dateline 2020-06-08, OE:

Malaysia’s prime minister on Saturday appointed the finance chief at Petroliam Nasional Bhd (Petronas) to take over as chief executive at the state energy company, at a time when lower oil prices and the coronavirus pandemic have hit the firm’s profits.

The government of premier Muhyiddin Yassin has made a series of management changes at state-owned companies and government agencies since coming to power in March following the unexpected resignation of his predecessor, Mahathir Mohamad.

Tengku Muhammad Taufik Tengku Aziz, currently chief financial officer will take over from Wan Zulkiflee Wan Ariffin as Petronas CEO from July 1, the prime minister’s office said.

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Petronas’ capex cut another shock to local O&G companies

June 17, 2020

Dateline 2020-05-27, The Edge:

Battered by plunging oil prices, local upstream oil and gas services companies were hit by another piece of negative news last Friday – that Petroliam Nasional Bhd (Petronas) plans to cut its annual capital expenditure by 21%, despite having said earlier that it would keep to what it had budgeted for previously.

The announcement places Petronas among oil majors like Exxon Mobil, Royal Dutch Shell, Saudi Aramco and Petrobras that have announced capex cuts ranging from 20% to 30% this year.

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Petronas cuts FY20 capex and opex as oil slump hits

June 13, 2020

Dateline 2020-05-22, The Edge:

Petroliam Nasional Bhd, which reported a 68% year-on-year fall in its first quarter profit after tax (PAT) today, is slashing its capital expenditure for the financial year ending Dec 31, 2020 by 21% from its initial estimate of around RM50 billion, as it faces challenges driven by the pandemic outbreak that has led to a supply-demand shock in the oil market this year.

The national oil giant said it will strive “as far as practically possible” to minimise the impact of the cuts to its Malaysian capex programme, previously planned at RM26 billion-RM28 billion this year.

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Associations engage Petronas to safeguard industry’s future

June 12, 2020

And the didn’t invite MOGEC. Where art thou?

Dateline 2020-05-21, NST:

Three associations representing the interests of the Malaysian oil and gas industry recently revealed they had engaged with Petronas to mitigate and address the current dire situation and circumstances affecting the industry.

Brought about by an unprecedented downturn due to the geopolitics of big oil producing countries, which has been amplified by the threat and spread of the Covid-19 pandemic, the associations — The Malaysian Oil & Gas Services Council (MOGSC), Malaysia Offshore Support Vessels (OSV) Owners’ Association (MOSVA), and the Malaysian Offshore Contractors Association (MOCA) — had a video conference meeting with the top leadership of Petronas last month.

During the meeting, the three associations representing over 500 companies and a workforce of 60,000, shared with Petronas the state of the industry and the challenges the companies were facing.

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CM: Sabah will continue to pursue 20pc from Petronas

June 9, 2020

Dateline 2020-05-14, Malay Mail:

Petronas’ new agreement with Sarawak does not have any bearing on Sabah, who just imposed a 5 per cent sales tax on petroleum products beginning last month.

Sabah Chief Minister Datuk Seri Shafie Apdal said that the state was sticking to its 5 per cent sales tax while it continued to pursue a 20 per cent oil royalty deal with the federal government that it has been eyeing for decades.

“That’s their negotiations with Petronas. We’ve already imposed the sales tax. We have an understanding with them and other petroleum companies,” said Shafie when asked to comment on Sarawak’s new agreement with Petronas and the federal government.

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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.

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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.

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