Hornbill Unleashed

August 22, 2014

‘Nothing to be proud of in Petronas’ 10pct offer’

Filed under: Politics — Hornbill Unleashed @ 8:03 AM
Tags: , , ,

See Chee HowDukau Papau

Sarawak PKR today warned Sarawak Chief Minister Adenan Satem that he should not be too happy to accept the offer of 10 percent equity in the Malaysia Liquefied Natural Gas Fourth Plant (MLNG 4) as the state government could be hoodwinked by Petronas.

“The 10 percent is merely an investment, but is blown out to hoodwink the state government and the general Sarawakian public into believing that Petronas is being generous to Sarawak.

“Sarawak should not settle for less than what the Sarawakians deserved, and the minute we settle for less, we get even lesser,” said Sarawak PKR vice-chairperson See Chee How (right) when commenting on Adenan’s statement that Petronas is offering Sarawak 10 percent in MLNG 4.

The chief minister had said that the offer was a result of the state’s negotiations with Petronas to increase its participation in the oil and gas industry and request for oil royalty increase from the present five percent to 20 percent.

See, who is the Batu Lintang state assemblyperson, said: “For the first three MLNG plants, the state has equity holdings of five percent in the first plant, 10 percent each in the second and third plants (MLNG 2 and MLNG 3).

“Now that we are offered 10 percent equity holding in the new fourth plant (MLNG 4), it merely maintains our equity holding in MLNG plants as we have had in 1992 (in MLNG 2).

“And, these are our investments. In 2003, Sarawak had paid and invested RM30 million for the 5 percent equity in MLNG first plant, RM40 million in 1992 for 10 percent equity in MLNG 2 and RM40 million in 1995 for 10 percent equity in MLNG 3.

“Surely, the 10 percent equity in MLNG 4 will not be given to Sarawak free of charge,” said See.

The PKR leader said that the chief minister and the state government should reveal the earnings through the state’s equity holdings in Malaysia Liquefied Natural Gas Sdn Bhd (MLNG) each year, from 1995.

“I would suggest that we have the same equity holding to these MLNG plants as Petronas as of now, and to eventually replace Petronas in equity holdings for future new MLNG plants.

“As of now, Petronas owns 90 percent equity in the MLNG first plant, 60 percent equity each in MLNG 2 and MLNG 3.

‘State’s equity returns were merely RM750mil’

“In 2012, the state has equity holdings in 47 unlisted companies, including the three MLNG. Collectively, from the investments in all these 47 companies, the returns were merely RM750 million.”

See pointed out that the state government and the public should not be hoodwinked into believing that the federal government and Petronas are generous and that they are on the way to satisfy the state’s demand for 20 percent royalty rights to the oil and gas produced from the state, which the state rightfully deserved.

“In fact, they have given us nothing yet,” See said.

He said that as at present, the five percent royalty from oil and gas is estimated to give the state RM1.666 billion and a 20 percent royalty will give Sarawak RM6.664 billion for this year alone.

“Imagine what we can do with that state revenue of RM6.664 billion from the extraction and export of petroleum and gas from Sarawak. And this is not including the excise and import duties from the petroleum products which is estimated at RM120 million this year, at the rate of five percent royalty.

“Therefore, the chief minister and the state government must be reminded that we should be asking for the RM5.358 billion that we are being shortchanged for this year and bear that royalty amount in mind when negotiating with the federal government and Petronas.

“As we are paying for the 10 percent equity holding and investment in MLNG 4 which will only yield results after 2017, this offer from Petronas actually does not go any way to make up for the RM5.358 billion that we are being shortchanged,” said See.

Giving the state government a gentle reminder See said: “If we are willing to settle for less than what we deserved, we will get less.

“The minute we settle for less, we get even lesser,” he stressed.

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10 Comments »

  1. Share are just paper value..invested 3B is still not profit..Easily shares can be diluted to creat losses..At the end of the day,the returns are minimal to the max.. Its like selling acohol to the red indians again..

    Comment by john.r.stephens — August 25, 2014 @ 9:04 AM | Reply

  2. Adenan and his disfunctioning administration is trying to hookwink Sarawakians into beliving that Sarawak, a partner in forming Malaysia, has received a 100% incrrease in oil royalty from the Federal government or National oil company, Petronas, from the present 5% to 10%.

    The Petronas’s offer of 10% equity participation in the yet to be constructed MLNG4 was nothing new as both Sarawak and Sabah had taken 10% equity in previous MLNGs. Sarawakians must not allowed our nation to be trampled upon at will by the Federal government. Sarawak and Sabah are indeed an independent nations within the Federation of Malaysia and the Independence of Sarawak is September 16 and not August 31 as Sarawakans were brainwashed to believe for several decades.

    Sarawakians must demand for a minimum of 20% petroleum royalty or vote out the BN government so that our 18 points agreement with Putrajaya shall be reviewed and upheld.

    Comment by Mata Kuching — August 24, 2014 @ 3:51 PM | Reply

    • Sarawak LOST its independence and became a vassal state of Malaya on 16 September.

      Why are we even arguing about 5% or 10% or 20%? ALL of the oil and gas wealth are our rightful inheritance. The treacherous Malayan bastards conspired with local PBB traitors Rahman Yakub, Taik Mahmud and Ada Style Saja to rob us of our birthright. From page 92 of Domination and Contestation: Muslim Bumiputera Politics in Sarawak by Mohd. Faisal Syam Abdol Hazis: “Through TAIB, the central state persuaded RAHMAN to hand over the rights of Sarawak’s continental shelf to the central government, depriving Sarawak from getting a 10 per cent royalty from the oil-producing company. In order to strike a deal with the Sarawak government, TAIB sent his loyal aide, ADENAN SATEM, to discuss with RAHMAN who was not in favour of the proposal.” Bona fide traitors Taik and Ada Style Saja are now busy putting on an act to appear like Sarawak patriots. We want our birthright back! All of it! No negotiation with thieves who stole from us!

      Comment by Hornbill Leashed and Gagged — August 25, 2014 @ 1:32 AM | Reply

  3. Just another sandiwara or wayang kulit to fool the simpleminded. These crooks are really good at conning the ignorant.

    Comment by Sharpshooter — August 23, 2014 @ 8:16 PM | Reply

  4. Petronas has briefed The State Cabinet that it is not sustainable to give higher royalty in view of the PSC’s structure involving cost oil. However there must be a way to go around this.
    What the State Government should do is get those knowledgable and experienced personnel both foreign and local who are well versed in PSC and oil and gas matters to face Petronas to strike a better deal for this royalty. There must be a solution to strike a balance to this. One simple way is to allocate certain percent of gas volume to the State Government at discounted price to monetised this gas for their down stream activities. Look at Trengganu and Pahang and later Johore – they are not major gas suppliers but the petro chemical activities are much more than the 2 east malaysian states. This spill over helps to develop the states and its downstream industries as well as abundance employment opportunities. I am not suprised that when Pengerang Project is in full swing of operation, the population of Dayaks in Johore will be more than in Sarawak.

    Comment by Ali bin Abu — August 23, 2014 @ 3:10 AM | Reply

  5. I fully agree with YB. This 10% is not a free gift. The State Government have to pay for it. We should get this share 10 years ago when the price of LNG is very good and so as the divident earned. I am not too optimistic the LNG price could be mantained as the future price for LNG does not look to be promising due to the development of SHALE gas with is ambundance in USA, Canada and, India and China. Even in Canada Petronas is divesting half or 50% of their Prince Rupert LNG project to other investors. In 5 years from alot of LNG projects will be realised. Russia will flood their gas to China via pipelines. Australia with its production capacity of more than 80 mtpa will flood the gas in the Pacific Basin which Japan is the biggest buyer. Qatar is now aggressively selling their gas in order to ensure that their 80 mtpa quantity will be committed. So what left for Petronas LNG volume at Bintulu. Those existing volume from the Tiga Project will not be continued by the existing customers when the contract expire few years from now because they have committed with other project as shareholders. More LNG buyers are interested in short term volume rather than base load commitment for long term because of lower spot prices which is nearly half of the long term price. The spot price is now about USD10 per mmbtu while long term to Japan based on JCC is about USD20 per mmbtu.
    The Crude price now is about USD100 per barrel. There will be strong pressure in future that because of the gas glut the LNG formula will be shifting from crude pegging to gas on gas pricing. If the price of LNG dropped to USD 4 per mmbtu which could happen the LNG project will be not feasibe. This happened in 1997 when the price is only about USD3 per mmbtu. Being in the LNG business for the past 37 years I predicted that the LNG will face with a glut 5 to 10 years from now. Even now the projects are facing difficult in getting new buyers as buyers are not willing to commit as yet. They take the position of wait and see as the future supply and demand will be very volatile. The shore based LNG projects will be replaced by floating LNG because it will be very expensive to invest on shore LNG due to infrastructures and piping costs. For train9 the cost of the SSGP pipelines is not cheap as the gas is from offshore Sabah and run in more than RM billion. Further the reliability of the piping is not guranteed as experienced in the recent explosion in Lawas recently. To sum up the era of high pricing for LNG will end in the coming few years. Even in this region Singapore planning to be the Gas Hub in this region will be the spoiler. The addition of floating LNG at Kenowit off Balingian and another one anchored at Rutan field off Labuan will futher contributed in a glut. Some of this volume will go to RGT at Sungei Udang and another one will be in Pengerang since the Lahad Datu was scrapped by Petronas. However this LNG Pricing will not be attractive as the domestic gas price from the PGU is about RM13 per mmbtu or USD 3.50 mmbtu while imported LNG is about US15 to 20 per mmbtu ( japan price) korea and china price maybe slightly lower.

    Comment by Ali bin Abu — August 22, 2014 @ 8:29 PM | Reply

    • Well, how much YB charges the Kampong people for the legal fees when you represent them in their NCR court cases versus the government? 10%? or a contract to harvest their plantations? Any honest answer please?

      Comment by Ustaz — March 18, 2015 @ 12:47 PM | Reply

  6. When politicians start to claw themselves into petronas’ pie, in not so distant years to come, petronas will be shredded into pieces and die much to the detrimental health of the nation’s coffers. Why can’t u people leave petronas alone? Kiasu and greedy lot. If u hv any axe to grind, do it without jeopardising petronas professional good name amongst international oil n gas players. If global O& G companies lose trust in petronas professional capabilities bcoz of stupid and greedy interfering busy body emotional politicians, petronas business is as good as gone. Which co support the nation’s espenses the most? Petronas is yours, mine n future generation’s piggy bank, stupid. So thread carefully. What will happen to petronas if trg, klantan, kedah, sabah and so forth demand the same pie? Greedy, irrational people.

    Comment by lia — August 22, 2014 @ 5:52 PM | Reply

    • Who’s greedy? Reclaiming our birthright is a just cause. How we spend it is none of anybody’s business. If you’re so generous and altruistic, why don’t you and your entire family hand over 95% of your income to UMNO in the name of national service?

      “Petronas is yours, mine n future generation’s piggy bank”. Really? Sarawak is the third poorest state in Malaysia. Did any of that piggy bank money trickle down to the hard-scrabble poor of Sarawak all these years? PETRONAS is UMNO’s piggy bank, and UMNO spends Sarawakians’ birthright like there’s no tomorrow on propping up hare-brained UMNO projects and bailing out dysfunctional and practically bankrupt UMNO crony companies.

      Why shouldn’t “trg, klantan, kedah, sabah and so forth demand the same pie” from PETRONAS? It’s just for them to reclaim what’s rightfully theirs and how they spend it is none of anybody’s business.

      Comment by Hornbill Leashed and Gagged — August 25, 2014 @ 7:33 AM | Reply

  7. Correct. Don’t jump for joy. This is not like getting 10% of Petronas profit. Sarawak could even lost money if Petronas ended up like MAS. What Petronas is doing is to offer a 10% share option to the state to buy into. They are pulling the wool over our eyes. It’s a rotten deal.

    Comment by apai — August 22, 2014 @ 1:31 PM | Reply


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