Oil and gas operators in Sabah want Petronas president Tan Sri Shamsul Azhar to resign, accusing him of failing to effectively manage the national oil conglomerate and failing to give Sabah a fair return from the natural resources extracted from its waters.
Sabah Oil and Gas Contractors Association (SOGCA), together with its Peninsular Malaysia partner, the Malay Economic Action Council (MTEM), yesterday expressed their disappointment over Petronas leadership and demanded for several specific changes to be introduced to safeguard the interest of the local companies.
SOGCA president Datuk Iskandar Malik said apart from appointing a new president to helm Petronas, SOGCA-MTEM also called on the government to consider having three or more individuals from Sabah to sit on the company’s board of directors.
He said they also wanted at least one Sabahan to be appointed as executive vice president, in addition to a Sarawakian currently holding the post.
“In addition, we also hope that both Petronas and the government will ensure that for every RM1 profit derived from operations in Sabah, RM0.30 should be given directly to state-based companies,” he said, reading from a written statement later issued to the press.
Realising the need to highlight issues faced by SOGCA members in the state, as well as other oil and gas industry players in Sabah, he said the association had decided to work alongside MTEM to set up a 1Malaysia Oil and Gas Development Programme (1MOGDP).
The proposed programme, he said, was aimed to enhance the oil and gas industry in Sabah and more importantly empower local companies to more actively participate in the sector.
According to him, Petronas currently does not have an active policy for Sabahans in terms of contracting and business opportunities, which resulted in locals getting crumbs and Sabah contractors only given low margin sub-contact projects.
He said it was disappointing that the bulk of profits from the Malaysian oil and gas projects continued to go to foreign companies such as Samsung, which awarded projects to Korean companies and employed workers from Thailand, Indonesia and the Philippines.
Iskandar also described the implementation of the Alliance Integrated Team (AIT) Concept by Petronas in Sabah as “suffocating the local contractors”, claiming it had given more power to Samsung and allowed it to manipulate the award of contracts and sub-contracts.
“The Korean sub-contractors would then sub-contract the tasks to local contractors, but of course it is based on ‘take it or leave it’ basis. We do not understand how Petronas can allow the foreign company to sub-contract the tasks to local companies, when they can award us the project directly,” he questioned.
In this regard, he said SOGCA suggested that Petronas’ seconded staff at AIT be rotated in order to neutralise ‘powerful’ roles in any of its projects in Sabah.
According to him, Sabahans were beginning to get more skeptical about Petronas’ claim of giving contract jobs to them, which has yet to happen until now.
He said the decision to pipe gas from Sabah Oil and Gas Terminal (SOGT) in Kimanis to the Liquefied Natural Gas (LNG) complex in Bintulu, Sarawak had not gone well as Sabahans felt they had been deprived of a highly lucrative project and its spin-offs.
Chairman of MTEM’s Oil and Gas Cluster, Tengku Putra Ahmad meanwhile urged the government to decentralize the licensing for oil and gas projects in Sabah, taking into consideration that the state contributed about 36 per cent of the country’s overall oil revenues.
He said MTEM-SOGCA wanted Petronas to implement the proposed 1MOGDP, which MTEM had presented to the company during a closed door meeting in February.
“In view of the coming 13th general election, we call on all Sabahans in particular, and Malaysians in general, to come together and urged contesting candidates to make a pledge on the management of the oil and gas sector and to change the leadership of Petronas.
“The people must make sure that the halatuju of Petronas is geared towards ensuring economic development for the locals above the interest of foreign companies,” he said.
MTEM is a Peninsular-based coalition of Malay non-governmental organisations, who has been equally vocal of their disappointment towards Petronas and alleged that all the company’s major contracts were being awarded to foreign companies.
Claiming that equally qualified local companies were being sidelined, MTEM has been calling on the nation’s premier leader to intervene and ensure that the contracts are awarded fairly.
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