PETROS, PETRONAS and PETRA – who’s really oiling the business for Sarawak ?
Petroleum Sarawak Berhad (Petros) - a Malaysian oil and gas company 100% owned by the state of Sarawak owned by the Sarawak State Government was thus formed on 7th August 2017.
This attracted much attention and generated feverish excitement among Sarawakians that finally, the oil and gas would be ‘flowing home’ as anticipated, as part of the on-going negotiations with Putrajaya over what belonged to Sarawak, including our Oil & Gas Resources under the Malaysian Agreement, popularly referred to as MA63.
That said, we are then made to understand that ‘Petros is not Petronas’ but will be working with it, AMONG OTHERS, as YAB Chief Minister Datuk Amar Patinggi Abang Johari mentioned that “all these initiatives by the State Government would ensure greater opportunities for Sarawakians and Sarawak companies to participate and invest in the oil and gas industry and to acquire expertise, knowledge and technology that would contribute to the continued growth and development of the oil and gas industry which will contribute to the economic success of the State and of Nation.”
Chairman of Petros, Tan Sri Datuk Amar (Dr) Hamid Bugo added that “we have revisited our purpose – that is to harness our resources for the sustainable progress of Sarawak and deliver on our growth strategy both in the upstream and for downstream Sarawak.” PETROS will be taking over the stewardship role of Sarawak onshore oil and gas activities.
‘State-owned Petroleum Sarawak Bhd (Petros) is expected to award petroleum contracts for the first two onshore blocks in northern Sarawak in first-quarter 2021 - Block SK 433 in the Miri area and Block SK 334 in the Engkabang area south of Marudi.
“We will encourage open bidding,” according to Petros Upstream executive vice-president James Foo, in his presentation on “Harnessing our resources, rejuvenating onshore” at a Sarawak oil & gas briefing for industry players last Friday.
He said Petros intends to package the prospecting licence and mining lease for both Block SK 433 and 334, adding that the petroleum contracts would be based on production/profit sharing between the investor and resource manager (Petros).
“Block SK 433 is the onshore extension of the prolific Baram Delta, which has been producing oil for decades.
Oil exploration and production activities have been concentrated offshore Sarawak where abundant resources have made it more lucrative for investors.
“Petros as onshore manager is to drive a focused programme to assess the remaining hydrocarbon potential for the entire Sarawak onshore aimed at early commercialisation of any discoveries and encourage prospecting and de-risking of frontier areas.
“Initial focus will be SK 433 and SK 334,” he added.’ [ TheStar, Tuesday, 03 Nov 2020 ]
Fast Forward – 2021 PETRA ENERGY, UZMA JV bags E&P contract from Petros for Block SK433 in Sarawak
‘A joint venture (JV) between Petra Energy Bhd and Uzma Bhd has secured a contract from Petroleum Sarawak Bhd (Petros) for the exploration, development and production of petroleum in Block SK433, onshore Sarawak.
According to both companies' filings this evening with the local bourse, the 29-year contract was secured by Petra Energy Development Sdn Bhd (PEDSB) and Uzma Engineering Sdn Bhd (UESB) JV — wholly-owned subsidiaries of Petra Energy and Uzma, respectively.
PEDSB will be the operator of the contract on behalf of the JV. Phase 1 of the job is for an initial period of four years, with a one-year extension option. Phase 2 involves development and production activities, which will start upon the successful outcome of Phase 1.
"The opportunity to explore, produce and develop the onshore block SK433 is a progression and an extension of its activities within the oil and gas industry. In addition, the Petra Energy group has the right capabilities and partner (UESB), bringing expertise and experience spanning sub-surface know-how, well services capabilities and production optimisation," it said.
The value of the contract, however, is not determinable, Petra Energy said, as it is based on the production of the asset, although both companies expect the contract to contribute positively to their future earnings.
[The EdgeMarkets June 18 2021]
‘BUSINESS POLITICS’ or POLITICS in BUSINESS – which is which ?
It is said that business and politics in Malaysia, including Sarawak, are inevitably related, if not ‘intertwined’. While it may be argued that both need each other for a ‘mutual and smooth co-existence’, this relationship is also a potential breeding ground for corrupt practices, notwithstanding the ‘checks and balances’, which are often overlooked, if not ignored for expediency.
Doubts were raised on whether ‘questionable deals’ had been concluded at the expense of prudency and good governance, as noted in the timber and plantation industries. If these were any guide, the oil and gas industry will be no exception, especially when it has all the signs of coming home to roost with the millions, if not billions to be made.
Hence eyebrows were raised among the oil and gas fraternity when Datuk Ibrahim Baki was appointed as a director of Petroliam Nasional Bhd (Petronas) on 17th August, 2020.
‘For one, while Ibrahim is not a prominent mainstream politician, he is the deputy secretary-general and supreme council member of Sarawak-based Parti Pesaka Bumiputera.
Since when, have politicians been appointed to the national oil corporation’s board?
Datuk Ibrahim is also executive chairman and non-independent director of Hubline Bhd, with a shareholding of 11.09% in the shipping company.
Hubline was quoted in new reports as saying that ‘the company was eyeing long-term contracts with the Sarawak government and Petronas for the transport of methanol products from an RM8 billion plant that is set to come onstream in Tanjung Kidurong, Bintulu, in 2023’.
While there should not be any objection to Petronas appointing a director from Sarawak, maybe it should consider a candidate with no conflict of interest.
Even though Ibrahim may not be involved in the award of contracts to Hubline, or declare his interest upon joining the board, a director with a major stake in a company bidding for deals with Petronas may make some uneasy.
As the guardian of the country’s oil and gas assets, Petronas must hold itself to a higher standard of governance.’ [TheEdge Malaysia September 1st 2020]
A Voice in the Wilderness ?….
but still a voice worth listening to….
The appointment of corporate figure Ibrahim Baki, a member of the ruling Parti Pesaka Bumiputera Bersatu’s supreme council, as the state’s representative on the Petronas board of directors was also singled out by Parti Sarawak Bersatu member See Chee How who ‘said the state government should have allowed the state assembly to deliberate, debate and decide on the appointment of Sarawak’s representative on the Petronas board.’
See, who is assemblyman for Batu Lintang, reiterated that “the Sarawak government must clarify and explain whether it was consulted and if it had recommended the appointment of Ibrahim to the Petronas board.” [FMT 21st August 2020]
PETROS….PETRONAS…..PETRA – what’s next ? Big, Bigger, Biggest ?
Connecting the dots…..
FACT No. 1 – PETROS was formed on 7th August 2017 ‘to ensure greater opportunities for Sarawakians and Sarawak companies to participate and invest in the oil and gas industry’.
Question : Who are the ‘Sarawakians’ who will really benefit from Petros
FACT No. 2 -- Datuk Ibrahim Baki, deputy secretary-general and supreme council member of Sarawak-based Parti Pesaka Bumiputera was appointed as a director of Petroliam Nasional Bhd (Petronas) on 17th August, 2020.
Question : As YAB CM’s close associate and a PBB Deputy Secretary-General and Executive Chairman of Hubline Berhad, whose interests is Datuk Ibrahim Baki’s actually serving, in his capacity as a Director of Petronas ?
FACT No. 3 – With Tan Sri Bustari Yusuf’s Petra Energy Berhad inking a JV with Uzma Berhad to secure a contract from Petroleum Sarawak Bhd (Petros), doesn’t this come across as a ‘business tinged with politics’ or a ‘politics mired in business’ deal ?
Tan Sri Bustari is well-connected with Umno-BN and KL Leaders. He has the wealth and power to influence the Sarawak ‘political landscape’.
His brother Fadillah Yusuf, the current Minister of works, has been rumoured to be ‘positioned’ as the ‘future Chief Minister of Sarawak’ – if GPS still holds the reins.
Is this a case of – ‘You help me, I help you’ ?
FACT No. 4 – With Petros, Petronas and Petra coming together with a ‘oneness in purpose’ – what holds for the ‘rights and interests’ of ordinary Sarawakians ‘pursuant to MA63’ insofar as our Oil and Gas resources are concerned - if the ‘track record’ of the timber and plantation industries were to taken as a guide ?
We would expect ‘leakages and seepages’ to happen as soon as the oil starts flowing from the wells.
It’s an oily and slippery road ahead for Sarawak with many ‘hands in the gloves’.
As John Travolta would have said – ‘Grease is the word’.
On the dot.
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