Adenan admits spectacular failure of oil talks

May 1, 2015

Spectacular as “we lost a pocket lining income pipeline”, or “we managed to get hit with GST on the royalty?”

Dateline 2015-03-19, FMT:

Sarawak Chief Minister Adenan Satem, just back from a visit to Sabah from where he came away “impressed”, has disclosed that oil talks with Petronas and the Federal Government have failed and spectacularly at that. “We don’t want people to take away our oil and gas with us being onlookers,” said Adenan. “We want an equal partnership.”

“We don’t want to be spectators. We want to be active participants.”

He pledged that the Sarawak Government would pursue the revised oil royalty demand until “we achieve what we want”.

The talks, based on an unanimous resolution passed by the Sarawak Assembly, was about raising the oil royalty to a respectable 20 per cent cash payout. Sabah and Sarawak, at present get a measly 5 per cent.

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Kelantan to include 14 questions in oil royalty suit

April 25, 2015

Dateline 2015-03-13, FMT:

The Kelantan Government has sought the High Court to include 14 questions and issues of law in the hearing of its suit against Petroliam Nasional Berhad (Petronas) for alleged breach of contract over its oil royalty.

Among others, the questions involve what rights the state government has over petroleum onshore and offshore, prior to the coming into force of the Petroleum Development Act 1974 on October 1, 1974 and the execution of the Kelantan Agreement and Kelantan Grant on May 9, 1975.

The other issues were, whether by refusing to pay cash payments to Kelantan although converting petroleum obtained offshore without paying for them, Petronas had acted in breach of Article 13 of the Federal Constitution.

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Cost rationalisation in O&G needed to improve efficiency

April 23, 2015

Was this after or before the CORAL 2.0 initiative announcement? And what is this 10% reduction capex rubbish? I have been referred to the 30% reduction memo.

Dateline 2015-03-10, The Borneo Post:

Significant cost rationalisation in the Malaysian oil and gas sector is expected by analysts to improve operating efficiency.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), most, if not all, global oil and gas producers including Petroliam Nasional Bhd (Petronas) have reiterated that there will be significant cost rationalisation in 2015 and beyond.

“Petronas was quoted in the media indicating that it will be reducing capital expenditures by -10 per cent and operating expenditures by approximately -25 per cent to -30 per cent,” MIDF Research said.

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Malaysia’s Petronas Swings to First Quarterly Loss

April 18, 2015

How about stopping those 10 course dinners for foreign workers? And the 10 figure paychecks for the same, while you are at it, as part of asking contractors to reduce pricing by 30%. Redistribute the wealth to, I don’t know, using local workers for the TGAST construction?

Dateline 2015-02-27, TWSJ:

Malaysia’s national oil-and-gas company, Petroliam Nasional Bhd., or Petronas, on Friday said it would cut its investment plans by as much as 30 billion ringgit ($8.3 billion) in the next two years as the company reported its first-ever quarterly loss.

For the three months ended Dec. 31, the company reported a net loss of 9.87 billion ringgit ($2.7 billion) compared with a profit of 9.58 billion ringgit a year ago. After including profit attributable to noncontrolling interests, the company reported a net loss of 7.27 billion ringgit for the quarter, compared with a profit of 12.76 billion ringgit a year ago.

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O&G consolidation should be in the works

April 12, 2015

Is this part of CORAL 2.0.1? And, no, this company hijacked the name, pretty much like that dark horse IGL.

Dateline 2015-02-21, The Star:

JUST over six months since the oil price collapse, the industry should be entering its consolidation phase.

For those still believing that the oil price collapse is not having any major changes to the industry, consider the following: speculation is rife that oil giant BP could be a takeover target for ExxonMobil, something that would have been unlikely just a while ago. And in China, officials are hatching a plan to form mega-mergers among the big state oil companies there, partly to produce greater efficiencies at a time of low oil prices.

In Malaysia, the many oil and gas (O&G) service providers that have mushroomed over the years were built on assumptions of a much higher oil price.

In other words, their cost structure does not suit the current environment.

Ideally, they should be restructuring themselves by drastically reducing their cost structure. But business owners will tell you that this is far from an easy endeavour.

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New man Wan Zulkiflee to helm Petronas in challenging times

April 10, 2015

Dateline 2015-02-10, The Malay Mail (I loved the old printed editions):

Malaysia named Datuk Wan Zulkiflee Wan Ariffin, a long-time company veteran, to lead its state oil producer, handing him the job of dealing with the slump in crude prices that’s eating into revenue the government needs to narrow its budget deficit.

The plunge in the price of crude since June has left Malaysia exposed as oil and natural gas products make up about 22 per cent of exports. That means belt-tightening at the company, known as PETRONAS, and by extension, the government.

About 30 per cent of the government’s 225 billion ringgit revenue in 2014 was oil related, including a RM29 billion dividend from Petronas, according to the finance ministry.

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‘Low oil price needs relook at strategies’

March 31, 2015

Dateline 2015-01-29, Borneo Post Online:

With the high supply, advancement of technology and slowing demand in the crude oil industry, it is necessary for industry players to relook at their strategies and approaches.

According to Mazuin Ismail, vice president of Technical Global, Upstream Business, Petronas Malaysia, demand is slowing and Organization of the Petroleum Exporting Countries (OPEC) is not being able to control it too much.

As such, the period of low oil price is likely to persist over the next few years.

“When we look at the prolonged period of oil price, we believe this will ‘stress test’ the industry because of the lower price. We have seen how it is reported that capital flight as much as US$500 billion has taken place.

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Saturday Star 2015-03-14 – Job Opportunities

March 16, 2015

Happy Pi of the Century day.  If you missed it, you can always aim for 31-4-’15, same month as May the Forth. Buy my recommendations, or through my Amazon store. Or get the Young Turks series (all 4 books). Where are those corporate sponsors? Or throw donations at me.

  • PETRONAS Technical Training is looking for Engineering Leaders, and Executives. Email them here.
  • An associate of mine is looking for a technical safety part-time adviser. Needs to be needle sharp with respect to QRAs, and HSE safety cases. A calm demeanor to handle nonsensical questions from young engineers helps as well. Either that, or a drinking problem.
  • Hess is still looking for a measurement and allocation engineer.
  • Nothing else this week

Support your local bookshop!  Bookalicious at The Summit Subang is a good choice. I think they focus on trilogies, quadrilogies, and other ologies. Tell them I sent you, and enjoy the look of perplexity on their faces. Those of you who have dropped my name, thanks!

Food choice of the week? How if you visit Vietnam, how about visiting and updating GoHalalVietnam! for your food needs. For your other needs, talk to your local tour guide/ concierge / man on the street.

As crude prices are low, you need all the help you can get to nail that elusive 2k job:

Social Engineering: The Art of Human Hacking, Ghost in the Wires: My Adventures as the World’s Most Wanted Hacker, The Art of Deception: Controlling the Human Element of Security

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Petronas may slash domestic investment 30 pct as crude slumps -sources

March 15, 2015

Dateline 2015-01-07, Reuters:

Malaysian state oil firm Petronas may slash capital expenditure even more than it has signalled because the continuing rout in oil prices has hurt revenue, with domestic spending facing cuts of about 30 percent, sources said on Wednesday.

Some domestic and international projects that may become unprofitable due to the continued decline in oil prices could be shelved by Petronas, or Petroliam Nasional Bhd, three sources with knowledge of the matter said.

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Ba’Kelalan people demand dialogue with Petronas

March 14, 2015

Tell me if I’m wrong, but isn’t one point of contention that the local people are habituating PETRONAS’ right of way land illegally? And because this is a sensitive issue, PETRONAS is in a lose-lose situation, up the proverbial creek without a poodle?

Dateline 2015-01-06, FMT:

The people in Ba’Kelalan, a stone’s throw from the Sabah-Sarawak interstate gas pipeline, are demanding a promised report and dialogue on the explosion in June last year at a section between Lawas and Long Sukang. They have lived in fear for their safety ever since that day.

The fiery explosion, heard some 12km away in Lawas, forced a temporary shutdown of the RM4 billion-project.

They do not rule out public protests should Petronas start shipping gas via the pipeline next month to South Korea and Japan as the local grapevine has it.

Ba’Kelalan Assemblyman Baru Bian, raising the issue, disclosed that the soil where the explosion occurred may not be firm as it was “still moving”.

“We are certainly concerned about our safety, especially the villagers in my village which is just 3km from the project,” said Baru who confirmed that he would support any public protests against the pipeline. “Some parts of the pipeline were exposed above ground.

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