Petronas may add more independent directors on Progress board

Petronas aims to overcome Canada’s opposition to its US$5.2bil (RM15.94bil) bid for Progress Energy Resources by adding more independent directors to the board of the gas producer, according to the Financial Times.

The newspaper cited the Malaysian state oil company’s chief executive, Tan Sri Shamsul Azhar Abbas, as saying in an interview that Petronas was prepared to make the move to soothe Canada’s concerns about a lack of transparency after the takeover.

Canada blocked Petronas’ bid for Progress last month, with Industry Minister Christian Paradis saying it was unlikely to bring a “net benefit” to the country. Petronas and Progress are planning a multi-billion-dollar liquefied natural gas plant on Canada’s West Coast.

Petronas has said it planned to make further submissions to win approval.

“We’ve told them if they want more transparency from us we’re prepared to increase the number of independent directors (on the Progress board). It’s good governance,” Shamsul was quoted as saying by the newspaper.

Shamsul also said Petronas as a whole had become more transparent since he took over in 2010, even though he reported ultimately to Prime Minister Datuk Seri Najib Tun Razak.

“In terms of governance and transparency we are not a listed company but we behave as one. There is no interference from the Government,” Shamsul said.

Petronas is Malaysia’s largest single taxpayer and its biggest source of revenue, covering as much as 45% of the Government’s annual budget.

Shamsul said Petronas had been in talks to cut special dividend payments to the Government, which amounted to RM28bil last year. The dividend would be cut next year by RM1bil and likely fall further each year, he said. – Reuters