KUALA LUMPUR – March 8, 2018: Despite Sarawak having full regulatory powers over its oil and gas sector from this July following the decision by Putrajaya on a devolution of power, Petronas will continue to have an important role there.
According to Chief Minister Datuk Amar Abang Johari Openg, the newly set-up Petroleum Sarawak Berhad (Petros) will rely on Petronas’ experience especially in upstream activities.
“Petronas has the expertise and we also have our own experts and engineers who are working in Petronas, Shell and other O&G companies. If we discover oil on Marudi land the oil would be ours but together with Petronas, we would extract the oil from there because they (Petronas) have the technology,” read Abang Johari’s statement at his official website.
O&G upstream activities are primarily centred on exploration and extraction of oil.
Petros was launched two days ago. The company –which Abang Johari assured will primarily employ Sarawakians – is expected to commence upstream activities within state waters in six months.
The news had generated mixed reactions among Malaysians, with some believing that Petronas will gradually be forced to cease operations in Sarawak.
Facebooker Emily Willy went to the extent of calling Petronas a parasite and wrote: “Without Petronas, Sarawak will finally get to enjoy our natural resources.”
Twitter user Shahril Dungau decided to bid goodbye to Petronas. “May you never be able to pillage our oils (sic) ever again.”
However, macro-economic analyst Professor Dr. Hoo Ke Ping doesn’t think that the Sarawak government will eject Petronas from the state.
Hoo is of the view that Sarawak may even end up being bankrupt if it chuck away Petronas willy-nilly.
“They (Sarawak government) would have to spend a lot of money to buy the company’s assets if they do that.
“Petros cannot operate on its own. If they do that, then the company will probably end up like Pertamina (Indonesian state-owned O&G company),” said Hoo.
Pertamina had, in 1975, almost triggered a series of defaults on foreign bank loans of at least USD$6.5 billion as result of what was reported to be extensive bureaucratic and monopolistic incompetence, corruption and unregulated exposure to the international financial system.
According to Hoo, it is crucial for Petros to leverage on Petronas, given the latter’s assets and experience.
“Everyone should bear in mind that the world recognises Petronas as the best managed national oil company,” said Hoo.