Sidestepping poser on Ku Li offer, minister explains Petronas losses

 

Minister in the Prime Minister’s Department for Economy Mustapa Mohamed has attributed Petronas’ second-quarter RM21.03 billion net loss to economic factors, not politics.

Mustapa said this in a Dec 2 written parliamentary reply to Bagan MP Lim Guan Eng.

Aside from asking for an explanation on the company’s latest performance, Lim had also sought confirmation on whether the Petronas chairperson role was offered to Gua Musang MP Tengku Razaleigh Hamzah.

Lim, a former finance minister, further questioned if the “political transaction” had jeopardised market confidence in the oil and gas conglomerate, which has three subsidiaries on Bursa Malaysia.

In his reply, Mustapha did not confirm or deny the offer but contended that market confidence was determined by other factors.

“Offering positions to any individual will not affect market confidence in Petronas because Petronas is a well-managed company that is led by an efficient management team.

“Market and investor confidence is dependent on various factors like the country’s economic growth and world trade - which have been severely affected due to the Covid-19 pandemic.

“This is compounded by the sharp fall in crude oil prices and the trade war between China and the United States,” Mustapa replied.

Government backbencher Tengku Razaleigh (above) previously revealed that he had declined, on constitutional grounds, an offer to be Petronas advisor.

The Perikatan Nasional administration has been accused of offering MPs positions in government-linked companies and agencies in exchange for political support.

Explaining the losses

As for Petronas’ second-quarter performance, Mustapha explained that it was due to the Covid-19 stricken economy.

“The loss was due to low revenue and significant impairment of assets following the drop in oil prices caused by low demand due to the Covid-19 pandemic and an oversupply in the market.

“In the second quarter of 2020, Brent crude oil dropped to an average of US$29.90 a barrel compared to US$68.83 a barrel in the second quarter of 2019,” he said.

Petronas posted a smaller RM3.4 billion net loss in the third quarter of this year.

Despite these losses, the national oil and gas company will contribute an RM34 billion dividend to the government of Malaysia in 2020.

In 2019, Petronas paid Putrajaya an RM54 billion dividend after posting an RM14.7 billion profit in the second quarter and RM7.1 billion profit in the third quarter.

Moving forward, the minister said the Petronas would work on its “three-pronged strategy” by maximising cash generation; expanding its core business and intensifying efforts to sustain its organisation in the face of change; plus ensuring the company’s future by being involved in new business opportunities. - Mkini

✍ Credit given to the original owner of this post : ☕ Malaysians Must Know the TRUTH

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