DID NAJIB ‘SACK’ MAHATHIR FROM PETRONAS SO HE COULD GO ANOTHER 1MDB-STYLE RAMPAGE? AS THE ‘SH**’ STARTS TO HIT THE FAN, NAJIB CAMP CRY ‘IT’S A CORPORATE DECISION’
There’s an apparently quite a bit of hue and cry among the usual suspects about this story,
Petronas will not proceed with LNG project in Canada
They made it as if it’s the end of the world….or at least the end of Malaysia, because of it.
I was like….aiyoo, that’s a corporate decision la. The sky would not collapse because of it.
And Petronas was not alone in the project. It made the decision with its partners.
Petronas announced the decision in this statement,
Today Pacific NorthWest LNG’s partners announced that the project will not be moving forward.
For almost five years we have been working with local governments, First Nations, residents and businesses about our proposed project and are very grateful for the support we have received.Thank you to the communities of Port Edward and Prince Rupert for welcoming Pacific NorthWest LNG and hosting our local outreach offices. In addition, thank you to all the communities in northwestern BC who expressed an interest in the project and took the time to work with us.
We would also like to recognize the time and efforts of all the area First Nations, including the Lax Kwa’laams First Nation, Metlakatla First Nation, Kitsumkalum First Nation, Gitxaala First Nation and Gitga’at First Nation, and all of the other nations residing in the Prince Rupert area who have kindly provided us feedback.
Our team members have been warmly welcomed by the communities. Thank you to the dozens of local businesses who we have had the opportunity to work with in the recent years.
Pacific NorthWest LNG will complete our outstanding business commitments by the end of September. Our Prince Rupert and Port Edward offices are scheduled to be closed effective August 25, 2017.
That project in Canada was started five years ago and Petronas, along with its partners tried very hard to make it a success.
As noted in its statement, Petronas worked with even the Canadian natives whom it thanked for their contributions and support for the project.
The project looked good indeed when it was first conceptualised, but things changed for the industry, especially over the past few years.
As everyone should know by now, the oil and gas industry is suffering the world over.
Most of the countries, especially those in the Middle East, which were dependant on oil money suffered.
One of my aunts (my father’s sister) who worked in Saudi Arabia returned home earlier this month after working there for almost 30 years. She’s home for good.
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She said the Saudi government is struggling to even pay its workers’ salaries now.
Who would have thought of that not long ago.
It’s one of those things that just happens, okay.
Therefore, if the Canadian LNG project is no longer viable because of the world oil price drop, then it’s good that Petronas pulled the plug off rather than suffering more losses.
If you google and read the news about the cancellation of the project, you would probably notice that it was not really Petronas’ fault.
Things just got complicated with the Canadian authorities on top of the sluggish O&G industry.
Anyway, all businesses make losses at one point or another.
Even a non-business person like me knows that.
You win some, you lose some. That’s the nature of business.
The trick is, try to win more than losing.
I think Petronas has always win more than lose.
Otherwise it wouldn’t be as successful as it is now.
Some asked why itchy to invest overseas and risks losses?
Well, you risk losses even at home.
Petronas is actually successful because of it’s ability to make good investments around the world.
It has a good global reputation, which was built on its good management skills and professionalism.
That what sets it apart from most other O&G companies from this part of the world.
All things considered, Petronas is still a winner despite the Canadian setback.
Let’s look a bit at the history of Petronas’ overseas investments. I just took this from Wikipedia,
Expanding globally: the 1990s and beyond
During the mid- to late 1990s, international exploration, development, and production remained key components in PETRONAS’ strategy along with diversification. A key discovery was made in the Ruby field in Vietnam in 1994. That year, the firm also saw its first overseas production from the Dai Hung field in Vietnam and established its first retail station outside of Malaysia in Cambodia.
In 1995, a subsidiary was created to import, store, and distribute liquefied petroleum gas (LPG). In addition, the company’s polyethylene plant in Kerteh began operations. PETRONAS marked a significant milestone during this time period—two of its subsidiaries, PETRONAS Dagangan Bhd and PETRONAS Gas Bhd, went public on the Kuala Lumpur Stock Exchange. Between 1993 and 1996, it purchased the former sub-Saharaian branch of Mobil Oil, rebranded as Engen Petroleum.
In 1996, PETRONAS entered the aromatics market by way of a joint venture that created Aromatics Malaysia Sdn Bhd. It also formed a contract with China National Offshore Oil Corporation and Chevron Overseas Petroleum Ltd. to begin exploration of block 02/31 of the Liaodong Bay area in China. While the Asian economy as a whole suffered from an economic crisis during 1997 and 1998, Malaysia was quick to bounce back due to successful government reforms. From its new headquarters in the PETRONAS Twin Towers, the state-owned concern continued its development in the oil and gas industry. Soon India’s Liberty Group purchased a 1% stake in Petronas
During 1997, PETRONAS heightened its diversification efforts. The firm set plans in motion to build three petrochemical plants in Kuantan as well as an acetic facility in Kerteh. Its first LPG joint venture in China was launched that year and the company acquired a 29.3% interest in Malaysia International Shipping Corporation Berhad (MISC). In 1998, PETRONAS’ tanker-related subsidiary merged with MISC, increasing PETRONAS’ stake in MISC to 62%. That year, PETRONAS introduced the Petronas E01, the country’s first commercial prototype engine. The company also signed a total of five new production sharing contracts (PSCs) in 1998 and 1999, and began oil production in the Sirri field in Iran.
PETRONAS entered the new century determined to expand its international efforts. The company forged deals for two new exploration plots in Pakistan and began construction on the Chad-Cameroon Integrated Oil Development and Pipeline Project. By 2002, PETRONAS had signed seven new PSCs and secured stakes in eight exploration blocks in eight countries, including Gabon, Cameroon, Niger, Egypt, Yemen,Indonesia, and Vietnam. The firm also made considerable progress in its petrochemicals strategy, opening new gas-based petrochemical facilities in Kerteh and Gebeng.
By 2003, Malaysia was set to usurp Algeria as the world’s second-largest producer of LNG with the completion of the Malaysia LNG Tiga Plant. Prime Minister Mahathir Mohamad commented on the achievement in a May 2003 Bernama News Agency article, claiming that “the PETRONAS LNG complex now serves as another shining example of a vision realized of a national aspiration, transformed into reality by the same belief among Malaysians that ‘we can do it.'” Indeed, PETRONAS had transformed itself into a global oil company over the previous decade, becoming a national symbol for success. The company realised, however, that it would have to continue its aggressive growth strategy to insure its survival in the years to come.
The PETRONAS overseas expansion drive continues with the acquisition of Woodside Energy Ltd Mauritania assets for $418 million in 2007.[11] The venture proved successful as they discovered oil in May 2008[12]
In 2004, Minister in the Prime Minister’s Department, Datuk Mustapa Mohamed, stated that PETRONAS contributed RM 25 Billion to the country’s treasury accounting for 25% of revenue collected via dividends and other revenues. PETRONAS continuously provides the Malaysian government dividends from its profits. Since inception in 1974, PETRONAS have paid the government RM 403.3 billion, with RM 67.6 billion in 2008. The payment represents 44% of the 2008 federal government revenue.[13] PETRONAS continues to focus on international exploration projects as 40% of revenue in 2008 was derived from international projects such as Iran, Sudan, Chad and Mauritania. The company’s international reserves stood at 6.24 billion barrels oil equivalent in 2008.[14]
On 29 October 2012, PETRONAS sources said it will renew a bid for gas producer Progress Energy Resources after Canada blocked its bid earlier that month. The $6-billion bid was approved by Ottawa on 7 December 2012.[15]
On 17 January 2013, PETRONAS issued a statement that an onshore oil and gas discovery has been made in the state after drilling a test well about 20 kilometres away from the city of Miri in northern Sarawak. The well was found to have a net hydrocarbon thickness of 349 meters. It had flow rates of 440 barrels of crude oil per day and 11.5 million standard cubic feet of gas per day. The find is the first onshore oil discovery in Malaysia in 24 years. [16]
On 2 May 2015, PETRONAS completed its acquisition of oil and gas assets in Azerbaijan from Norway’s Statoil for US$2.25 billion.[17]
Plagued by the 2010s oil glut, PETRONAS reported on 26 February 2015 that it cut its 2015 capital expenditures budget after reporting a $2 billion fourth quarter loss, the company’s first loss since it began reporting quarterly results five years ago.[18]
On 1 April 2017, PETRONAS’ PFLNG SATU, is the world’s first floating liquefied natural gas (LNG) facility, has achieved a new milestone with the successful loading of its first cargo at the Kanowit gas field, offshore Bintulu, Sarawak. PFLNG SATU will complement PETRONAS’ global LNG portfolio, making it a leader in the FLNG technology and enhancing its reputation as a preferred and reliable LNG supplier.[19]
And Petronas is also a winner in F1 with Mercedes. It’s a world champion.
That, after all the investments and supposed losses when it first started with the Sauber team.
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