Petronas to allocate RM2.1 billion yearly for Sarawak contractors

Petronas has agreed to allocate RM2.1bil of its oil and gas contracts exclusively to Sarawak-based contractors annually.

Assistant State Communications Minister Datuk Lee Kim Shin revealed this during Chinese New Year, saying it was one of the outcomes reached in the on-going negotiations between Sarawak, the federal government and the national oil company for more oil royalties for the state.

Lee called it a boon for the state economy and attributed it to Chief Minister Tan Sri Adenan Satem for taking a firm stand on the "poor deal" the state has been getting for decades.

"It is due to his strong stand on oil royalty. He put up a very strong petition to Petronas to give more royalty or other benefits to Sarawak.

"For example, Petronas now has agreed to a few things, for example, a minimum of RM2.1bil worth of contracts to Sarawakian companies," Lee said here.

"Also, Petronas will give more shares of subsidiary companies, meaning that Sarawak will benefit more.

"All this while, Sarawakian companies were just sub-contractors. The main contractors came from outside. Most of our companies have been in the oil and gas industry for more than 100 years. We have the most experience."

Petronas Carigali cuts salaries by 20%

Petronas Carigali Sdn Bhd has asked its staff to take a 20% pay cut in view of the challenging market conditions caused by low global oil prices, a source told SunBiz.

According to a memo obtained by SunBiz, Petronas Carigali indicated that a 20% reduction in current salaries would be required effective May 1, 2015.

The company said in the memo that it intends to continue investing to sustain production levels despite the low oil price environment affecting its expenditure and projects feasibility. However, it would be challenging to do so at the current cost structure and as part of its cost optimisation efforts, the company has decided to revise salary rates.

Sabah mahu ambil alih cari gali minyak

Ketua Menteri Sabah Datuk Seri Musa Aman berkata kerajaan negeri bercadang mengambil alih eksplorasi Marginal Oil Field di Sandakan kerana pendekatan itu menguntungkan dan tidak terlalu bergantung harap kepada pencarian ekuiti semata-mata.

"Bukan saja kami (kerajaan negeri) minta penambahan royalti (minyak) tetapi juga minta Marginal Field di Sandakan yang telah diluluskan oleh Petronas. Kami mahu ambil alihnya," katanya dalam sesi soal jawab pada persidangan Dewan Undangan Negeri.

Petronas, HHI to sign US$1.1 bln novation agreement with MISC

Petronas and Hyundai Heavy Industries Co Ltd (HHI) have agreed to enter into a novation agreement with MISC Bhd that will involve an expenditure of about US$1.1 billion.

The agreement is for the novation of Shipbuilding Contracts (SBCs) between Petronas and HHI to the shipping company, for the construction and delivery of new LNG carriers (Newbuild LNGCs).

In conjunction with the novation agreement, Petronas via its indirect subsidiary Petronas LNG Sdn Bhd (PLSB) has also agreed to enter into Time Charter Parties (TCPs) for the charter of the Newbuild LNGCs.

BASF, Petronas Chemicals to build 2-EHAcid plant in Malaysia

Germany's BASF and Malaysia's Petronas Chemicals Group Bhd will build the first Southeast Asian plant producing 2-Ethylhexanoic Acid (2-EHAcid), the companies said on Monday without disclosing the cost.

The plant, located in Malaysia, is expected to start production in the fourth quarter of 2016 and will have a total annual capacity of 30,000 metric tonnes of 2-EHAcid, the companies said in a statement.

2-EHAcid is a chemical intermediate used in the production of synthetic lubricants as well as oil additives

Petronas' slumping profits

In tandem with the steep decline in oil prices, Petroliam Nasional Bhd (Petronas) is expected to report less than RM10bil in pre-tax profit for its soon-to-be released fourth-quarter results for the financial year 2014 (FY14), say industry sources.

The price of Brent crude has more than halved from the high of US$115 recorded in mid-June last year to about US$55 a barrel currently, with the slide largely happening in the final three months of the year.

For the current year of operations, analysts are expecting Petronas, which is expected to announce its 2014 fourth-quarter results in the next few weeks, to record a sombre set of results.

Oil pipeline through Myanmar to China expected to open in Jan -sources

A crude oil pipeline and a deep sea port meant to secure an alternative route for Chinese imports overland through Myanmar are set to open at the end of January, but an affiliated refinery in China is months away from completion, sources said.

The finished development should help ease China's reliance on shipments via the narrow and potentially risky Malacca Strait. Although that route, through which some 80 percent of China's oil imports now pass, would still be used for the vast majority of overseas purchases.

PetroChina, the main investor in the facilities, has built 60 percent of the refinery in Yunnan province that borders Myanmar, designed to process the crude shipped via the pipeline, a spokesman for the state energy giant said on Monday. Completion is slated for later this year.

Shell ends $6.5B Qatar project as oil price falls

Qatar Petroleum and Royal Dutch Shell have scrapped plans for a petrochemicals project, worth an estimated $6.5 billion, due to the slump in global oil prices.

In a statement issued on Wednesday, Shell said the Al Karaana project would not go ahead because of the "high envisaged capital cost that has rendered it commercially unfeasible, particularly in the current economic climate prevailing in the energy industry".

The joint venture between the Anglo-Dutch energy giant and state-owned Qatar Petroleum had been signed in December 2011.

At the time it was envisioned that a huge "world-scale petrochemicals complex" would be built in Ras Laffan, an industrial city some 80 kilometres (50 miles) north of Doha.

The Qatari company was to own 80 percent of the project, and Shell the remaining 20 percent.

Last year it was reported that the project would be completed in 2018.

However, the decision not to proceed was taken, said Shell, after "careful and thorough evaluation of commercial quotations".

Global oil prices have dived since last June and continued to fall on Wednesday after major crude producers insisted they would maintain current output levels despite oversupply.

AFP

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No more marginal oil field awards for now

PETRONAS will not proceed with the awarding of new marginal oil fields unless the price of Brent crude settles above US$80 per barrel.

According to Petronas president and chief executive, although the breakeven for marginal oil fields is US$65 per barrel, they will not look into any such proposals until the global price situation stabilises.

“We would be comfortable to embark on marginal oil fields only when the price settles down at more than US$80 per barrel,” he said.