Petronas in Chad , and what next?

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JK's Digest no 32 of August, 06 <212 of 2006>  Enron of Malaysia?

Sad episode of Petronas in Chad, but what is the wider implication?

After writing "Chad's fury over Petronas and 2 others" and "How much is the loss in Chad?", this is something more food for thought.

It is serious allegation of not paying tax in the global scenario afterall the accounting and taxation functions of Petronas are handled by the big three international firms.  What has gone wrong?

I was told by a big 3 firm at an IDS seminar that Petronas was well respected in the international arena as one of the 500 big global FORTUNE corporations although its account is always not so transparent.

So is there any governance issue as far as taxation is concerned?

Like Enron and Worldcom and others respected international companies, Petronas can kick off a vicious circles of the others keeping a closer scrutiny over Petronas in 35 other nations where Petronas operate.


How cash- or asset- rich is Petronas in its present balance sheet despite the recent high fuel prices?

Would Petronas capable to resolve all its 'domino' impacts in the world stage when other countries could jump in the bandwagon of Chad - which ridiculously 'expelled' Petronas.
Ridiculous it may seem, but in normal case, any taxation authorities would bar the company from leaving the country until all taxes are paid.  In this case, it is exactly the opposite, WHY?

Maybe Petronas have enough assets in Chad to be foreclosed to pay off all the tax liabilities.  So how many billions has Petronas lost or to be lost when the oils wells are just beginning to generate wealth?  Who can tell this massive figures of financial setbacks to affect every Malaysian?  Enron was a private company but Petronas is a Government owned entity.

So a word of caution, as I had been prophetic in my past writings, would Petronas going so high up is going to come down so hard that the nation would never recover from this impact of financial crisis?  

We can only blame ourselves as someone wrote in Malaysiakini (http://www.malaysiakini.com/letters/55834) like I did before several times that we allow Petronas to be shrouded in secrecy.  Actually I had lodged a Police Report in 2004 against the performance of Petronas.


Finally why another Muslim nation treat another brother like that?

Joshua Kong
Author of New Wealth Order, EPIC of Sabah, FIRE, Sabah Wealth - image of woods power,
EPIC of Sabah - 2nd Edition, Paper to Parliament Select Committee on Unity and National Service.
EPIC of Sabah - 3rd Ed., WATER,         A tussle in biodiversity of two liquids - palm oil and water,
Sabah and Sarawak in Malaysia in 1963, Paper

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JK? Digest no 33 of August, 06 <213 of 2006> More on Petronas in 2007

There was a speculation of what would be for Malaysia in 2007.

Something terrible happened to M'sia in 1987, then 1997 and what? in 2007?

Sound familiar but would that happened when top company -Petronas is expelled from Chad with wide implications in the global arena.

What is adverse impact in the performance of the 'shrouded secret' company with the lower production of Petronas in its commitment to the concerned buyers in 2007?

How much has Petronas lost/ wasted investment since 1988 in Chad, now that the oil well came on since 2004?

I wrote at least two published letters titled "Sabah's oil must not suffer fate of timber" and "Petronas needs to explain on the declining performance" (both Daily Express 28 Oct 1998 and 12th May 2002 respectively).

I had also lodged Police Report in December 2004. ( see below).

Petronas also has much loan facilities.

Joshua Kong

Author of New Wealth Order, EPIC of Sabah, FIRE, Sabah Wealth - image of woods power,

EPIC of Sabah - 2nd Edition, Paper to Parliament Select Committee on Unity and National Service.

EPIC of Sabah - 3rd Ed., WATER, A tussle in biodiversity of two liquids - palm oil and water,

Sabah and Sarawak in Malaysia in 1963, Paper

Police Report lodged at Karamunsing Police Station, Kota Kinabalu on December 2004

Petronas & Sabah (P&S)

Petronas and its performance and impact on the welfare of Sabah Why has this become an issue after 28 years since 1976?

It is really patriotism that we raise this issue now, as a natural development in a nation deemed to enjoy equal benefits from the resources of the nation. We are not asking for wealth from another part of Malaysia but within our own shores. The case of Terengganu yet to be resolved in the Courts is not applicable to Sabah for historical and geographical reasons.

While the current rate of the royalty at 5% has been openly queried by so many quarters in recent years asking for more increase of that percentage, I am more concerned about the whole operations and the management of the fuel oil around Sabah by Petronas which had been assigned outright by agreements to deal with the production of the fossil fuels. I believe the profit sharing of successful wells found in Sabah had been determined with outsiders for very long periods hence there is no provision for any mechanism of changes mid way.

In the absence of transparency and accountability when Sabah is not entitled to verify the performance of the Petronas and Sabah is not likely a shareholder of that company, it is now timely that the Government looks into the following areas.

1) Do we know why the recent brief reports up to 31st March 2003 and even up to same year ended 31st March 2004, Petronas had been lacking in financial performance since commenced operation for almost 28 years? How efficient and effective are the regulations of the Federal Government over the Petronas company? The Government seems to be satisfied despite poor performance for the massive funds.

2) What is the rationale of Petronas investing heavily in foreign exploration (deemed risky) activities in 35 countries when our own sectors are allocated to foreign companies? Petronas should present detailed accounts for such operations and the returns expected of such adventures over the years for public consumption as part of the good governance and accountability when the national interests and national resources are involved.

3) As far as the Sabah sector is concerned, can we know who actually own the resources found in the shores of Sabah. It would appear Petronas only owns a small percentage of the oil finds and bulk of the shareholding is held by outsiders. Who are the real shareholders of these substantial shareholding held by foreigners? Why is it that Petronas would not invest more in our own shores?

4) The Finance Minister II made a statement in the Parliament about Sabah getting more percentage of the oil royalty but it was withdrawn soon after. Would the Government review the whole operation of Petronas in the context of globalisation and the volatile prices cum strategic resources?

5) With so many massive new oil wells in Sabah, yet our oil will be exhausted in 18/19 years from now, and would the Government explain this scenario in greater details? Oil is sold in barrels but Sabah? data as available is expressed in tonne. The data of crude oil exports and value as per schedule P&S 1 and graph P&S 1 would indicate that only 11 out of 27 years the oil fetched the price level above the Sabah? average of RM441,000 per 1,000 tonne. It would appear that more oil were sold when the prices were low. The graphs show great volatility. Who make such business decisions- Petronas or the Concessionaires?

I have written a couple published letters on Petronas (ref pages P&S 2), and it is rightly that I raise relevant pressing issues to the appropriate authorities through this Police Report to deal with some major anomalies unfolding before us. I trust this effort would bring the grudges held by many over the way Petronas had been conducting itself to a level where the public can be positively informed. One of the questions so often asked is that despite our resources in timber and fossil fuel, Sabah is now so poor with hardcore poverty at about 16% and more. Every one in Sabah can be a millionaire, and yet many are surviving from hands to mouths with the level of costs of living here, and how can we really explain to the people of Malaysia? Despite our timber image gone, the cost of living has not gone down, instead the trend is still upwards

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dominoes?