Monday, June 23, 2008

Petronas (By Dr. Mahathir)


Dr. Mahathir
24 June, 2008

Certain members of Parliament are focusing on Petronas, apparently trying to divert attention from Government over the thoughtless increase in oil prices. If I am not mistaken this is a prelude to appointing a 4th floor candidate as head of Petronas as they did when removing Tengku Mahaleel of Proton.

There is also an attempt to blame me for "advising" the Government on removing the subsidy. I would like to clarify again that although I am called Adviser to Petronas, I do not advise at all, least of all to the Government.

Once in a while I get a briefing from Tan Sri Hassan Marican, the President of Petronas. I also get the annual report which is available to the public. My main job is that of a post box. I pass on to Tan Sri Hassan numerous requests and proposals which people send to me. I have absolutely no say in the decisions made by Petronas.

During the time I was Prime Minister, Petronas reported to me and I made certain decisions e.g. the price of gas to be sold to power stations, the need to go abroad for oil exploration and production. To keep electricity price low I did not allow gas price to be increased. Petronas sustained losses but not much as crude prices were around US30 dollars per barrel. Today it is US139 dollars per barrel. Gas prices have likewise increased so that losses sustained by Petronas is much higher. That is for the Government and Petronas to sort out.

The public may have noticed that only Petronas supplies Natural Gas for Vehicle (NGV) for motor vehicles. The amount is also limited. This is because sale of NGV incurs a bigger loss to Petronas as the Government did not reimburse. The other oil companies refuse to sell gas as they would lose money at the price fixed by the Government during my time.

I have an office at the Petronas Towers and I am paid an allowance of RM15,000 per month, less RM5,000 income tax. If the Government wants me to step down now that I am not an UMNO member it is welcome to do so.

It would be a pity if politics is brought into the management of Petronas. Unlike other national petroleum companies Petronas has become one of the international petroleum companies like Shell, Essso, Total and others.

It operates in 36 different countries worldwide and its business includes upstream and downstream activities, onshore and offshore. One-third of its revenue comes from foreign operations. It is a Fortune 500 company listed at around 250.

If the 4th Floor takes over, Petronas may suffer the same fate as most national petroleum companies. Petronas staff are very well trained and much in demand overseas. If they leave I am not so sure Petronas will continue to be the model national petroleum company that many oil producing countries desire to emulate.

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