DESI-YL Chong has been trying to thread the core issues of the PETRONAS STORY the past three years, and especially the rcent weeks since theGovernment aised the petrol price by 40percent, and it has been a wretchedly difficult task because there are so many gaps. But some gaps were mercifully filled recently by two NST reports -- one News and the other Opinion --and I received "tremendous" help from a newly-befriended BLOGGER who resides at www.donplaypuks.blogspot.com, whose cyber-moniker I shorted to "DPP"! I am very the GOoD at bequeathing newfoundfriends -- not necessarily from Newfoundland! -- easy to call AB. (AB, if you must know, is for ABbreviation, why do people want LONG words ah?)
I thank DPP @Shankar VS with more than a cuplet of tehtarik since Pu-erh tea was not available when we met up at CentralMarket,KL, recently, as he threw much "light" into our pathways to discover the TRUTH about Petronas' money trail, and we carried on our conversations via Email, still chasing the mystery RM....billion trail.
For now, I shall just produce the news report starring Petronas CEO, Tan Sri Hassan Marican. He seemed quite angry.
But I also know my matey writer DDP is more angry.
And I too know that I am blardy extremely angry, the angriest of damned all! (For once, I am inclined -- like myGOoDfriend Ancient Mariner, to swear, but I won't reprise his words of vicedom hear!)
I tell you WHY we are damned blardy angry TOMORROW when I add my Comments, if thou be Miss Patience's companion for 24. No tehtari' for this for incalcation of GOoD values by itself is just reward!For now, the two NST extracts, and DPP's email content to Desi:)
CEO: Don't blame Petronas, it's a global problem
http://www.nst.com.my/Current_News/NST/Wednesday/National/2270609/Article/index_html
By Marc Lourdes and David Yeow, New Straits Times
June 18, 2008
KUALA LUMPUR: Petronas should not be made the scapegoat for the fuel price hike, said its president and chief executive officer Tan Sri Hassan Marican.
"It is a global problem and not the oil company's fault that prices have increased."
Hassan said Petronas employees were being verbally attacked for the price increase and urged Malaysians to remain calm and look at the bigger picture.
He explained that 65 per cent of Petronas' profits went straight to the government.
Petronas was formed in 1974 with an initial capital of RM10 million.
"From then until the end of 2007, it has made RM570 billion. RM336 billion had been paid to the government in that time," he said, adding that the remainder of the company's money was reinvested in exploration and building refineries, among others
He also pointed out that the company has 300,000 employees, stressing that it "does not just take but gives back as well".
"While in the past we have paid more, doing so now would hinder our efforts to discover new oil reserves in other parts of the world," he said, adding that 30 per cent of its oil reserves were overseas.
"We are trying to extend Malaysia's status as a nett oil exporter for as long as we can. By increasing our payment (to the government), we might not be able to delay becoming a nett oil importer past 2014," he said during an interview on RTM last night.
He added that the company had to think of the future and if Petronas' explorations pan-ned out, Malaysia could maintain the same rate of production for another 22 years.
On whether Petronas should be held accountable to Parliament and not just the prime minister, Hassan said that was up to Parliament to decide.
He said under the Petroleum Development Act 1974, the national oil company was accountable to the prime minister of the day.
"That's not for me to say. The Petroleum Development Act was passed by Parliament."
He said Petronas operated under the Companies Act 1965 and, as required by the act, published a financial report every year.
Hassan was also asked why oil prices in Malaysia could not be kept as low as other oil-rich countries like Venezuela, Saudi Arabia and Brunei.
He said Malaysia, with a population of about 24 million people, had a daily production of 700,000 barrels compared with Saudi Arabia's 10 million barrels with the same population size.
"Not only is oil cheap there, so are water and electricity. They can afford it because production is so high.
"Venezuela adopts a populist policy and because of that, there has been no new investment. Their production has dropped from four million barrels a day to 2.5 million."
Petronas and its subsidiary Petronas Carigali accounts for about 75 per cent of the national oil production. The rest is obtained by production- sharing operators.
Hassan also said oil prices were increasing globally because of various factors, including speculation, the geo-political scene and increased demand from the developing economies of China and India.
He pointed out that in 2006, there were seven million new vehicles in China.
"If each vehicle used 10 litres of petrol a day, that is a daily increase of 70 million litres."
*************************************
From an Opinion piece by Santha Oorjitham in the NST June 18, 2008, I extracted the followinG:
"Petronas made RM86.8 billion in pre-tax profit last year. Of this, it paid RM52.3 billion to the government in royalty, dividends, corporate income tax, petroleum products income tax and export duty. That formed about 32 per cent of the government's total RM142 billion revenue.
As Petronas' profits go up, its contributions to the government increase, notes Hassan. That revenue goes into the government's consolidated fund, part of which is used to subsidise oil prices.
Petronas itself also subsidises the price of gas sold to both the power and non-power sector. According to the EPU booklet, that came to RM18 billion last year.
On the retail side, Petronas sells about 31 per cent of petrol and diesel to motorists. If it subsidised pump prices, which some Malaysians are suggesting, the president points out that would amount to subsidising foreign oil companies such as Shell, Exxon Mobil, BHPetrol and Caltex which retail in Malaysia.
Those who ask why subsidies are being reduced now may not be aware that they only started in 2004 for petrol — with a four-sen subsidy.
Until then, the government had been collecting duty, which it gave up in 2004. Now, notes Hassan, the government is “both forgoing duty and paying out a subsidy”.
He explains that the pump price includes the actual cost of petrol or diesel, the operating costs (including transportation and marketing), margins for dealers and the retail oil companies — balanced out with either a subsidy or duty.
________________________________________
And finally, from one Sdr Shankar's Email update, in response to R.V.David,'s comment at Malaysiakini.com's Letters Column, brought to my reading by none othher than hawk-eyed DDP, out of the courthouse, but in Petronas courtyard:)
Hassan Merican has a good reputation both locally and internationally, as a no nonsense CEO of sound integrity and proven track record.
But, in recent years we have seen lack of transparency in several of our leading Plcs where massive accounting and trading frauds have occurred.
A prime example of this is Transmile, where the Chairman, former MCA Head, Tan Sri Ling Liong Sik, walked away from the mess last year, without being held accountable for anything.
Too, another Chairman, an ex-SC Head, was allowed to resign without much protest from the aborted listing of GP Ocean for false declarations, as were a prominent banker and siblings (substantial shareholders)as directors.
No query was forthcoming from the SC or investigations undertaken (as far as we know)over the disposal of a substantial stake to a Middle East party by Maxis, within a month after the Plc was taken private.
The additional gain to Maxis' main shareholders was reputed to be some $300 million. Why were shareholders of the Plc not informed earler? Surely they had a right to hold out for a higher offer for their shares?
We have these $120 million oil plam futures trading losses at Golden Hope, now part of the restructured Sime Darby Group.
Although 5 top executives have been asked to and have resigned, this begs the question why the matter was not announced to the KLSE in 2007 as required under the SC rules for such a significant event. Why was it allowed to be quietly secreted away in the 'Notes to the Accounts.' What, $120 million is peanuts?
Globally too, we have seen that most major frauds and embezzlements are committed by top management, directors, working shareholders and Board members e.g. Enron, Global Crossings, Tyco, Bank Nat Paris, Barings S'pore, to name a few.
Merican, and it will do his sterling reputation no good to indulge in spin-semantics, should not be seen to be evasive that Petronas' accounts are posted at their official website and 'in the library at Parliament' whatever that means!
Go take a look, and you wil see that these are the abridged version, not those with full details of P&L & Balance Sheet items and notes/explanations.
Cost of sales and taxes for the 6 months to 30th Sept 2007 amount to RM 60 billion; in a full year it will be RM 120 billion.
How much does Petronas subsidise on MPO, F1,Prasarna, PMB, MAS, Petronas Uni? What are the perks and remuneration of their top executives? How does it compare with international norms?
And crucially, what is the % of non-Malays employed by Petronas? Based on the 2007 AR, 8 out of 8 Directors are Bumis, while for senior management it is 12 out of 14.
Why does 1 person hold all 3 positions of Chairman, President & CEO?
Is Meritocracy actually practised or has Petronas, like so many GLC's, become an enclave for a single group from our populace?
How much of oil has it sold forward and at what average prices. When will we run out of oil - 2011,2015, 2020 or 2025? What else does it subsidise that we have not been told about.
How much $ of bad investments has Petronas written off?
Who was responsible? And where are the Auditor's Report & Certificates, who were they?
And why for God's sake why has Petronas ventured into Property & Condo Development & Shopping Malls?
In this day an era, no one can expect public disquiet to be disarmed with 'Trust me, everything's ok!' Not even if Jesus were the CEO!
And this is really what our gripe is all about.
Why is Petronas the only exception to the rule so that it is not answerable to Parliament or audited by the Auditor General and its detail financial statements made public?
Who independently appoints Petronas' Auditors then?
What safeguards do we have that Petronas will not be the epicentre of the next Global Accounting Fraud or Embezzlement?
What assurance do we have that due procedures - open tender - have been followed in awarding major contracts costing hundres of millions, if not billions?
How has it been so easy for Kencana and Scomi, helmed by sons of former and current PM's to break so easily into the O&G business.
Questions such as these cannot be answered by the Auditors since it falls under the purview of 'Company or Government Policies.'
We do not know the answers because there is a haze over Petronas.
It may well be that Petronas is the most transparent, prudent and best managed corporation in M'sia. I hope so.
But transparency must be 'seen to be done'.
Obfuscation or affected umbrage from the powers-that-be will not wash with a savvy public that has found its feet after GE 2008.
We, the People want the answers quick, and demand it!"
PS: Go to donplaypuks.blogspot.com IF you wish to read the ORIGINAL letter by David,; if thou wish to be a lazy BUMmer (knot like Desi:), just digest Shankar's (akaDPP's) comment. (Good for BF or tea-break if you steal can afford wan!:(
DESIDERATA: I am beat,it's 11.48PM now, so I will resume the Petronas' Unfinished Story if I get my mental machinery oiled 24 from now. If not, I am not beholdened to anyone except DPP because I did really promise him I would try to pull altogether whatever I have in my Archives to try fathom the breadth and depths of Petronas' black gold, and the Rakyat's share of the Multi-Billion-dollar pipes flowing... WE DON"T KNOW WHERE!
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