The Dewan Rakyat has passed the Petroleum Income Tax (Amendment) Bill 2011 after it was read three times on Wednesday, June 29.
Azmin Ali (PKR-Gombak) raised an objection under Article 46(4) of the standing orders that if 15 or more members object to a decision, a voice vote must follow.
The bill was passed when Deputy Speaker Datuk Ronald Kiandee announced that 45 of 75 voters were for and 29 against.
Earlier, when wrapping up the debate on the bill, Deputy Finance Minister Datuk Dr Awang Adek Hussin said the incentives related to the Petroleum Income Tax Act 1967 included reducing the income tax rate from 38 per cent to 25 per cent for marginal oilfields.
Besides that, capital allowance would be speeded up from 10 to five years for marginal oilfields, and investment allowance given to projects requiring high capital expenditure and technical skills, he said.
"This incentive is to encourage investment for increased national petroleum production and help reduce the management cost of the upstream petroleum industry to attract more exploration activities as well as oilfield development," he said.
The Securities Commission (Amendment) Bill 2011 tabled by Deputy Finance Minister Datuk Donald Lim Siang Chai was also passed by the Dewan Rakyat.
The amendment includes expansion of the commission's surveillance functions and a working outline to recognise foreign auditors and audit firms. - Bernama
Wednesday, 29 June 2011
Tuesday, 28 June 2011
Rozali: O&G revenue to beat water at Puncak Niaga in five years
Puncak Niaga Holdings Bhd plans to have its oil and gas (O&G) division contribute about 60% of the group’s revenue within the next five years, overtaking its core water business.
Puncak Niaga chairman Tan Sri Rozali Ismail said the company would spend US$59 million (RM179.2 million) to acquire two O&G companies, Global Offshore (Malaysia) Sdn Bhd and KGL Ltd, by the end of the year.
“At the end of the year, we hope to finalise the acquisition of 100% of the shares in these companies. These companies have existing business in O&G and have contracts in hand from Petronas. They are good ventures,” he said, adding that the O&G business would become the second core activity for the company.
Global Offshore is 51%-controlled by Selecta Flow (M) Sdn Bhd, a private company and a vehicle of Datuk Khalid Ngah, while the remaining 49% is held by Global Asia Pacific Industries Sdn Bhd, a unit of US-based, Nasdaq-listed Global Industries Ltd.
Global Industries’ largest shareholder is William J Dore who, according to Bloomberg, has a 10.5% stake in the US O&G player.
Global Offshore is an installation and pipelaying contractor and, through its parent company, operates the pipelay barge Hercules, as well as other offshore construction vessels. Rozali said efforts would be made to secure jobs in the O&G sector in Malaysia and other parts of the world, as there is a lot of potential in the sector.
“We are confident that it will contribute substantially. By next year it should contribute about 20% to our revenue and, hopefully, five years down the road it will contribute 60%,” he said.
However, Rozali reiterated that Puncak Niaga’s water, waste-water and environmental businesses remain the company’s core focus and they have much potential despite the differences between the company, the Selangor government and the federal government on the issue of water-sector consolidation in Selangor.
“We assure our shareholders that we are continuing to supply quality water for both industrial and domestic consumers … with the constraints that we have, with limitations in terms of investment and capital expenditure that have been put on hold by the federal and state governments,” he said.
On the issue of Selangor’s water-sector consolidation, Rozali said: “As a company, we have obligations to fulfil under our concession agreement. The state and federal governments have different authorities and responsibilities in this business. Raw water and land are under the state’s purview. Financing, licensing and approving certain budgets and works are under the purview of the ministry and National Water Services Commission (SPAN).
Everybody has their own jobs to do and I hope they follow the spirit of the concession agreement.”
He said any talks on acquisitions must follow the agreement and he would await new suggestions or proposals from both the state and federal governments.
Puncak Niaga is also set to expand its water business overseas. In the pipeline is a project in Cambodia, for which the company hopes to ink a contract in the next few months. It is also exploring opportunities in China, India and Laos.
Puncak Niaga chairman Tan Sri Rozali Ismail said the company would spend US$59 million (RM179.2 million) to acquire two O&G companies, Global Offshore (Malaysia) Sdn Bhd and KGL Ltd, by the end of the year.
“At the end of the year, we hope to finalise the acquisition of 100% of the shares in these companies. These companies have existing business in O&G and have contracts in hand from Petronas. They are good ventures,” he said, adding that the O&G business would become the second core activity for the company.
Global Offshore is 51%-controlled by Selecta Flow (M) Sdn Bhd, a private company and a vehicle of Datuk Khalid Ngah, while the remaining 49% is held by Global Asia Pacific Industries Sdn Bhd, a unit of US-based, Nasdaq-listed Global Industries Ltd.
Global Industries’ largest shareholder is William J Dore who, according to Bloomberg, has a 10.5% stake in the US O&G player.
Global Offshore is an installation and pipelaying contractor and, through its parent company, operates the pipelay barge Hercules, as well as other offshore construction vessels. Rozali said efforts would be made to secure jobs in the O&G sector in Malaysia and other parts of the world, as there is a lot of potential in the sector.
“We are confident that it will contribute substantially. By next year it should contribute about 20% to our revenue and, hopefully, five years down the road it will contribute 60%,” he said.
However, Rozali reiterated that Puncak Niaga’s water, waste-water and environmental businesses remain the company’s core focus and they have much potential despite the differences between the company, the Selangor government and the federal government on the issue of water-sector consolidation in Selangor.
“We assure our shareholders that we are continuing to supply quality water for both industrial and domestic consumers … with the constraints that we have, with limitations in terms of investment and capital expenditure that have been put on hold by the federal and state governments,” he said.
On the issue of Selangor’s water-sector consolidation, Rozali said: “As a company, we have obligations to fulfil under our concession agreement. The state and federal governments have different authorities and responsibilities in this business. Raw water and land are under the state’s purview. Financing, licensing and approving certain budgets and works are under the purview of the ministry and National Water Services Commission (SPAN).
Everybody has their own jobs to do and I hope they follow the spirit of the concession agreement.”
He said any talks on acquisitions must follow the agreement and he would await new suggestions or proposals from both the state and federal governments.
Puncak Niaga is also set to expand its water business overseas. In the pipeline is a project in Cambodia, for which the company hopes to ink a contract in the next few months. It is also exploring opportunities in China, India and Laos.
Monday, 27 June 2011
Bumi Armada sets IPO at RM2.80-RM3.15
Malaysian oil and gas services provider Bumi Armada has set a price range of RM2.80 to RM3.15 per share for its public offering next month, raising as much as US$906 million (RM2.7 billion), according to a term sheet seen by Reuters today.Bumi Armada is an offshore support specialist, and is the only Malaysian company that owns floating production storage and offloading (FPSO) vessels, which carry a premium lease rate.
Bumi Armada was privatised in 2003 by tycoon T. Ananda Krishnan, and a planned relisting in 2008 was delayed due to the global financial crisis.
CIMB is the joint global co-ordinator and bookrunner for the offering. — Reuters
Saturday, 25 June 2011
Kencana 3Q net profit jumps 81% to RM56.42m
KENCANA PETROLEUM BHD’s earnings rose 81% to RM56.42 million in the third quarter ended April 30, 2011 from RM31.17 million a year ago underpinned by the progress achieved for the oil and gas contracts.
It said on Friday, June 24 that revenue rose 34.7% to RM377.83 million from RM280.37 million. Earnings per share were 3.08 sen versus 1.92 sen a year ago.
“Compared to the corresponding quarter ended April 30, 2010 of RM280.37 million and RM36.5 million, revenue and profit before tax had increased by approximately 35% and 91% respectively in the current quarter.
“This is mainly due to higher progress achieved for contracts in hand on the back of bigger order book and better management of relevant costs as well as contribution from drilling services,” it said.
For the nine-months, earnings increased by 69% to RM159.38 million from RM94.3 million while revenue increased by 31.5% to RM 1.06 billion from RM811.51 million.
Its cash and cash equivalents increased to RM809.50 million as at April 30 from RM222.39 million on July 31, 2010.
It said on Friday, June 24 that revenue rose 34.7% to RM377.83 million from RM280.37 million. Earnings per share were 3.08 sen versus 1.92 sen a year ago.
“Compared to the corresponding quarter ended April 30, 2010 of RM280.37 million and RM36.5 million, revenue and profit before tax had increased by approximately 35% and 91% respectively in the current quarter.
“This is mainly due to higher progress achieved for contracts in hand on the back of bigger order book and better management of relevant costs as well as contribution from drilling services,” it said.
For the nine-months, earnings increased by 69% to RM159.38 million from RM94.3 million while revenue increased by 31.5% to RM 1.06 billion from RM811.51 million.
Its cash and cash equivalents increased to RM809.50 million as at April 30 from RM222.39 million on July 31, 2010.
Friday, 24 June 2011
Transocean Report Blames BP for Gulf Spill
Transocean, the Swiss company that owned the rig lost in last year’s oil spill in the Gulf of Mexico, issued an extensive report on the disaster on Wednesday that largely blames BP, the well’s owner.
Related
The conclusions of the 854-page, two-volume report may not be particularly surprising, considering the enormous liability in civil lawsuits and possible federal criminal charges.
The report does attribute some errors to Transocean, but the “incident,” it states, was caused by “a succession of interrelated well design, construction and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of failure.”
Temporary abandonment is the process of plugging the well after the initial drilling so that new equipment can be brought in to complete the well in order for production to begin; the report states that BP engineers produced at least five such plans for the well from April 12 to April 20, the day of the blast.
All of those decisions, “many made by the operator, BP, in the two weeks leading up to the incident,” were “driven by BP’s knowledge that the geological window for safe drilling was becoming increasingly narrow.” Halliburton, which was in charge of the operation to seal off the well, did not properly test the cement used in that process, and BP did not verify the results, according to the Transocean report.
The report stated it did not “represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault,” a statement that was greeted with seeming incredulity by a spokesman for BP.
The spokesman, Scott Dean, called the report an “advocacy piece” that underplayed Transocean’s role and “cherry-picked the facts in support of its litigation strategy.”
BP, he said, “has stepped up to its responsibilities and cooperated with all official investigations regarding the accident,” while Transocean “continues to take every opportunity to avoid its responsibilities.”
Other reports, including BP’s own, have found a larger role for Transocean. A report in April by the United States Coast Guard spread the blame broadly among companies involved in the well, citing problems at Transocean that included inadequate maintenance and training and a “poor safety culture.”
The blowout of the Deepwater Horizon rig killed 11 workers and spread millions of gallons of oil across gulf waters and beaches.
James P. Roy, a lead lawyer for lawsuits against BP and others in federal court over the spill, called the new report “a valuable addition to the search” for why the rig blew out, although “it is not 100 percent comprehensive.”
Related
The conclusions of the 854-page, two-volume report may not be particularly surprising, considering the enormous liability in civil lawsuits and possible federal criminal charges.
The report does attribute some errors to Transocean, but the “incident,” it states, was caused by “a succession of interrelated well design, construction and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of failure.”
Temporary abandonment is the process of plugging the well after the initial drilling so that new equipment can be brought in to complete the well in order for production to begin; the report states that BP engineers produced at least five such plans for the well from April 12 to April 20, the day of the blast.
All of those decisions, “many made by the operator, BP, in the two weeks leading up to the incident,” were “driven by BP’s knowledge that the geological window for safe drilling was becoming increasingly narrow.” Halliburton, which was in charge of the operation to seal off the well, did not properly test the cement used in that process, and BP did not verify the results, according to the Transocean report.
The report stated it did not “represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault,” a statement that was greeted with seeming incredulity by a spokesman for BP.
The spokesman, Scott Dean, called the report an “advocacy piece” that underplayed Transocean’s role and “cherry-picked the facts in support of its litigation strategy.”
BP, he said, “has stepped up to its responsibilities and cooperated with all official investigations regarding the accident,” while Transocean “continues to take every opportunity to avoid its responsibilities.”
Other reports, including BP’s own, have found a larger role for Transocean. A report in April by the United States Coast Guard spread the blame broadly among companies involved in the well, citing problems at Transocean that included inadequate maintenance and training and a “poor safety culture.”
The blowout of the Deepwater Horizon rig killed 11 workers and spread millions of gallons of oil across gulf waters and beaches.
James P. Roy, a lead lawyer for lawsuits against BP and others in federal court over the spill, called the new report “a valuable addition to the search” for why the rig blew out, although “it is not 100 percent comprehensive.”
Thursday, 23 June 2011
Vietnam, Malaysia to pump oil from Diamond field
Vietnam and Malaysia are expected to start commercial production soon at a new oil field off Vietnam's southern coast after tests showed good crude oil reserves, a Vietnamese state-run newspaper reported on Thursday.
Drilling since April 2011 at the Diamond field in the 01-02 block, 162 km (100 miles) northeast of the southern province of Ba Ria-Vung Tau, has found oil and gas and assessment of the field's recoverable reserves was now under way, the New Energy newspaper said.
It gave no specific output details for the field. Block 01-02, where Ruby, Pearl and Topaz oilfields are operational, is being developed by Malaysia's Petronas Carigali (PVCL) and Petrovietnam Exploration Production Corp (PVEP), units owned by state-run oil firms in the two countries.
Ruby, Pearl and Topaz now pump a combined 20,000 barrels per day, said the newspaper, which is run by the Vietnam Oil and Gas Association.
Petronas and PVEP have had success in developing Block 01-02 and are expected to bring in "greater achievements", Petrovietnam Chairman Dinh La Thang was quoted by the newspaper as saying during a visit to the field on Tuesday.
State-run Petronas, which wholly owns PVCL, has an 85 percent stake in the production-sharing contract of block 01-02 while PVEP, the exploration and production arm of state oil and gas group Petrovietnam, has 15 percent, the report said.
Drilling since April 2011 at the Diamond field in the 01-02 block, 162 km (100 miles) northeast of the southern province of Ba Ria-Vung Tau, has found oil and gas and assessment of the field's recoverable reserves was now under way, the New Energy newspaper said.
It gave no specific output details for the field. Block 01-02, where Ruby, Pearl and Topaz oilfields are operational, is being developed by Malaysia's Petronas Carigali (PVCL) and Petrovietnam Exploration Production Corp (PVEP), units owned by state-run oil firms in the two countries.
Ruby, Pearl and Topaz now pump a combined 20,000 barrels per day, said the newspaper, which is run by the Vietnam Oil and Gas Association.
Petronas and PVEP have had success in developing Block 01-02 and are expected to bring in "greater achievements", Petrovietnam Chairman Dinh La Thang was quoted by the newspaper as saying during a visit to the field on Tuesday.
State-run Petronas, which wholly owns PVCL, has an 85 percent stake in the production-sharing contract of block 01-02 while PVEP, the exploration and production arm of state oil and gas group Petrovietnam, has 15 percent, the report said.
Wednesday, 22 June 2011
Australia’s military looks north to protect oil and gas
Australia is looking to boost its military power in the northwest to protect its booming offshore oil and gas sector and counter new challenges from China and the Indian Ocean, Defence Minister Stephen Smith said today.
The shift, being considered in a defence posture review, could see new amphibious assault ships and the planned Joint Strike Fighters based across Australia’s sprawling north and western coastlines, where resource companies have invested billions in offshore oil and gas projects.
The posture review would also consider strategic challenges from the Indian Ocean rim and reflect the growth of military power in the Asia Pacific, although Smith said the shift was not focused on China’s rising muscle.
“We are confident China will emerge as ... a responsible stakeholder. As the Chinese would say, into a harmonious environment. We are confident of that,” Smith said. “There is more than one country in the Asia Pacific.”
The United States, Australia’s top strategic ally, also plans to increase its Asia Pacific presence. Smith said Australia’s review would complement a similar review under way in Washington.
China’s growing military power has alarmed other countries in the region, especially Japan and Taiwan. In March, China said it would boost defence spending by 12.7 per cent in 2011 and has made modernising its navy a priority.
India is also building a blue-water navy to extend its strategic reach, while modernising its armed forces.
Australia is considering building up to 12 new long-range submarines and has committed US$7.6 billion (RM23.1 billion) for three powerful air warfare destroyers, due in service from 2015.
Australia is also aiming to buy 100 Lockheed Martin F-35 Joint Strike Fighters, to complement the fleet of F/A-18 Hornets and Super Hornets, currently based in Queensland, New South Wales and the remote Northern Territory.
The boom resource state of Western Australia has a major navy base near the capital Perth, and is home to the country’s elite Special Air Service forces, but there are no major military bases in the state’s north, facing Asia.
Smith said security of energy resources from offshore oil and gas projects off Western Australia and the Northern Territory posed a new security challenge.
“I do see very much an expanding petroleum resources industry off the coast of northwest Western Australia and off the coast of the Northern Territory as a significant security consideration,” he said.
“There is a prospect we will see more defence assets in Western Australia.”
The region includes the Gorgon oil and gas fields, operated by Chevron , Woodside’s northwest shelf oil and gas fields, the Browse basin targeted by Royal Dutch Shell and Woodside’s Sunrise oil and gas fields.
Australia currently has more than US$200 billion of proposed liquefied natural gas export projects in the pipeline, and the industry is eyeing a production goal of 60 million tonnes per annum by 2020, triple current production levels.
“This is the appropriate time to do a force structure review, because of the strategic and security factors of the modern era,” Smith said. “As circumstances change, our posture needs to change.” — Reuters
The shift, being considered in a defence posture review, could see new amphibious assault ships and the planned Joint Strike Fighters based across Australia’s sprawling north and western coastlines, where resource companies have invested billions in offshore oil and gas projects.
The posture review would also consider strategic challenges from the Indian Ocean rim and reflect the growth of military power in the Asia Pacific, although Smith said the shift was not focused on China’s rising muscle.
“We are confident China will emerge as ... a responsible stakeholder. As the Chinese would say, into a harmonious environment. We are confident of that,” Smith said. “There is more than one country in the Asia Pacific.”
The United States, Australia’s top strategic ally, also plans to increase its Asia Pacific presence. Smith said Australia’s review would complement a similar review under way in Washington.
China’s growing military power has alarmed other countries in the region, especially Japan and Taiwan. In March, China said it would boost defence spending by 12.7 per cent in 2011 and has made modernising its navy a priority.
India is also building a blue-water navy to extend its strategic reach, while modernising its armed forces.
Australia is considering building up to 12 new long-range submarines and has committed US$7.6 billion (RM23.1 billion) for three powerful air warfare destroyers, due in service from 2015.
Australia is also aiming to buy 100 Lockheed Martin F-35 Joint Strike Fighters, to complement the fleet of F/A-18 Hornets and Super Hornets, currently based in Queensland, New South Wales and the remote Northern Territory.
The boom resource state of Western Australia has a major navy base near the capital Perth, and is home to the country’s elite Special Air Service forces, but there are no major military bases in the state’s north, facing Asia.
Smith said security of energy resources from offshore oil and gas projects off Western Australia and the Northern Territory posed a new security challenge.
“I do see very much an expanding petroleum resources industry off the coast of northwest Western Australia and off the coast of the Northern Territory as a significant security consideration,” he said.
“There is a prospect we will see more defence assets in Western Australia.”
The region includes the Gorgon oil and gas fields, operated by Chevron , Woodside’s northwest shelf oil and gas fields, the Browse basin targeted by Royal Dutch Shell and Woodside’s Sunrise oil and gas fields.
Australia currently has more than US$200 billion of proposed liquefied natural gas export projects in the pipeline, and the industry is eyeing a production goal of 60 million tonnes per annum by 2020, triple current production levels.
“This is the appropriate time to do a force structure review, because of the strategic and security factors of the modern era,” Smith said. “As circumstances change, our posture needs to change.” — Reuters
Monday, 20 June 2011
Malaysia’s limited oil and gas reserves are running dry, spelling trouble for the government as it relies on national oil company Petronas for nearly half its revenue, said a leaked United States diplomatic cable.
According to the cable released by whistleblower website WikiLeaks, a Petronas board member admitted to US embassy officers here in 2008 that the company “feels tremendous pressure to grow its business in order to maintain Malaysia’s political status quo.”
“Petronas wants to stay insulated from politics but must comply with GOM (the government of Malaysia) policy,” Datuk Mohd Azhar Osman Khairuddin, now a vice president at Petronas, was quoted as saying in the cable published in full by the Malaysia Today news portal today.
“Azhar told us that Malaysian O&G reserves are not large and are running out soon. (Note: Conoco Philips Malaysia confirmed that without new discoveries, Malaysian oil production will decline at approximately 10 per cent per year, from 550,000 bpd in 2008 to roughly 490,000 bpd in 2009 and 450,000 bpd in 2010.)
“Azhar noted that revenues from Petronas accounted for 45 per cent of the GOM budget last year and stated that the GOM is over-reliant on Petronas to fund its operations,” said the document classified by the embassy’s then economic counsellor, Matt Matthews.
Petronas made a pre-tax profit of RM90.5 billion for the year ending March 31, 2011. On top of taxes, Petronas has been paying the government a dividend of RM30 billion since 2009, up from RM24 billion in 2008, RM20 billion in 2007, RM13 billion in 2006 and just RM9.1 billion in 2005.
However, a new proposal expected to take effect in 2013 will see dividends paid by the state-owned oil company fixed at 30 per cent of net profit.
According to the cable, Azhar said that Petronas wanted to invest in productive O&G assets to “promote future profitability rather than be spent now on domestic programmes for political gain.”
“He described Petronas as a stabilising force in Malaysia and in Asean regionally and his desire that the USG recognise the important role Petronas plays in maintaining political stability in the region,” the report added.
According to the leaked document, embassy officials had met Malaysian oil and gas firms due to concerns over business activities in Iran but Petronas said it had no active investments in the Islamic republic.
However, Petronas said in April last year that it sold spot volumes of gasoline from third party traders and suppliers to customers in Iran.
The cable also quoted a foreign ministry official as saying that “Malaysian firms go to Iran with suitcases of money to purchase oil and gas concessions from the Iranians. He said that they bring too much cash to count the money, so they weigh it to determine if the amount is correct.”
It named principal assistant secretary and America desk officer Muhammad Radzi Jamaludin as saying that two private companies, SKS Ventures and Amona, claimed they had no financing sources for their projects in Iran.
However, Radzi “did not offer why Malaysian firms would purchase such concessions for projects they were unable to finance.”
According to the cable released by whistleblower website WikiLeaks, a Petronas board member admitted to US embassy officers here in 2008 that the company “feels tremendous pressure to grow its business in order to maintain Malaysia’s political status quo.”
“Petronas wants to stay insulated from politics but must comply with GOM (the government of Malaysia) policy,” Datuk Mohd Azhar Osman Khairuddin, now a vice president at Petronas, was quoted as saying in the cable published in full by the Malaysia Today news portal today.
“Azhar told us that Malaysian O&G reserves are not large and are running out soon. (Note: Conoco Philips Malaysia confirmed that without new discoveries, Malaysian oil production will decline at approximately 10 per cent per year, from 550,000 bpd in 2008 to roughly 490,000 bpd in 2009 and 450,000 bpd in 2010.)
“Azhar noted that revenues from Petronas accounted for 45 per cent of the GOM budget last year and stated that the GOM is over-reliant on Petronas to fund its operations,” said the document classified by the embassy’s then economic counsellor, Matt Matthews.
Petronas made a pre-tax profit of RM90.5 billion for the year ending March 31, 2011. On top of taxes, Petronas has been paying the government a dividend of RM30 billion since 2009, up from RM24 billion in 2008, RM20 billion in 2007, RM13 billion in 2006 and just RM9.1 billion in 2005.
However, a new proposal expected to take effect in 2013 will see dividends paid by the state-owned oil company fixed at 30 per cent of net profit.
According to the cable, Azhar said that Petronas wanted to invest in productive O&G assets to “promote future profitability rather than be spent now on domestic programmes for political gain.”
“He described Petronas as a stabilising force in Malaysia and in Asean regionally and his desire that the USG recognise the important role Petronas plays in maintaining political stability in the region,” the report added.
According to the leaked document, embassy officials had met Malaysian oil and gas firms due to concerns over business activities in Iran but Petronas said it had no active investments in the Islamic republic.
However, Petronas said in April last year that it sold spot volumes of gasoline from third party traders and suppliers to customers in Iran.
The cable also quoted a foreign ministry official as saying that “Malaysian firms go to Iran with suitcases of money to purchase oil and gas concessions from the Iranians. He said that they bring too much cash to count the money, so they weigh it to determine if the amount is correct.”
It named principal assistant secretary and America desk officer Muhammad Radzi Jamaludin as saying that two private companies, SKS Ventures and Amona, claimed they had no financing sources for their projects in Iran.
However, Radzi “did not offer why Malaysian firms would purchase such concessions for projects they were unable to finance.”
Malaysia’s oil drying up, Petronas told US envoys
The Petronas executive said the oil firm was forced to comply with the government’s policies. — Reuters pic
According to the cable released by whistleblower website WikiLeaks, a Petronas board member admitted to US embassy officers here in 2008 that the company “feels tremendous pressure to grow its business in order to maintain Malaysia’s political status quo.”
“Petronas wants to stay insulated from politics but must comply with GOM (the government of Malaysia) policy,” Datuk Mohd Azhar Osman Khairuddin, now a vice president at Petronas, was quoted as saying in the cable published in full by the Malaysia Today news portal today.
“Azhar told us that Malaysian O&G reserves are not large and are running out soon. (Note: Conoco Philips Malaysia confirmed that without new discoveries, Malaysian oil production will decline at approximately 10 per cent per year, from 550,000 bpd in 2008 to roughly 490,000 bpd in 2009 and 450,000 bpd in 2010.)
“Azhar noted that revenues from Petronas accounted for 45 per cent of the GOM budget last year and stated that the GOM is over-reliant on Petronas to fund its operations,” said the document classified by the embassy’s then economic counsellor, Matt Matthews.
Petronas made a pre-tax profit of RM90.5 billion for the year ending March 31, 2011. On top of taxes, Petronas has been paying the government a dividend of RM30 billion since 2009, up from RM24 billion in 2008, RM20 billion in 2007, RM13 billion in 2006 and just RM9.1 billion in 2005.
However, a new proposal expected to take effect in 2013 will see dividends paid by the state-owned oil company fixed at 30 per cent of net profit.
According to the cable, Azhar said that Petronas wanted to invest in productive O&G assets to “promote future profitability rather than be spent now on domestic programmes for political gain.”
“He described Petronas as a stabilising force in Malaysia and in Asean regionally and his desire that the USG recognise the important role Petronas plays in maintaining political stability in the region,” the report added.
According to the leaked document, embassy officials had met Malaysian oil and gas firms due to concerns over business activities in Iran but Petronas said it had no active investments in the Islamic republic.
However, Petronas said in April last year that it sold spot volumes of gasoline from third party traders and suppliers to customers in Iran.
The cable also quoted a foreign ministry official as saying that “Malaysian firms go to Iran with suitcases of money to purchase oil and gas concessions from the Iranians. He said that they bring too much cash to count the money, so they weigh it to determine if the amount is correct.”
It named principal assistant secretary and America desk officer Muhammad Radzi Jamaludin as saying that two private companies, SKS Ventures and Amona, claimed they had no financing sources for their projects in Iran.
However, Radzi “did not offer why Malaysian firms would purchase such concessions for projects they were unable to finance.”
Sunday, 19 June 2011
Malaysia's 1st deepwater oilfield producing less than expected
Malaysia's first deepwater field is producing less than expected due to sand in the oil although output should recover by this year, the Business Times reported on Wednesday, citing its operator Murphy Oil Corp .
"The workover programme should be completed this year and production rates back to the planned level," a Murphy spokesman was quoted as saying.
"We have three well shut-ins due to fines migration coming through the sandscreens and being produced with the oil. It is important to keep the fines materials out of the surface process equipment."
Murphy was not immediately available for comment.
Murphy's Kikeh field offshore Malaysia's Borneo state of Sabah has a current gross production of around 52,000 barrels of oil per day. The report did not say how much production had dropped to.
The shutting in of three oil wells at the Kikeh field has seen crude oil exports fall 11.5 percent in the first quarter, local media quoted a government minister as saying this week.
The Kikeh discovery is the first deepwater discovery in the Southeast Asian country, which has now embarked on a drive to boost deepwater oil production and reverse flagging domestic production.
Located in almost 4,400 feet of water, the Kikeh Field lies in the southern part of Block K. Murphy has an 80 percent working interest in Blocks K and H with a combined cover over six million acres since 2002.
Petronas Carigali, a wholly owned exploration and production arm of Petronas , holds the remaining 20 percent.
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