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Sakmongkol ak 47

ariff.sabri@gmail.com

Saturday, 4 July 2009

PETRONAS- the Empire strikes back?


will the PM remove the posts please?


I thought the PETRONAS issue has come to an end. Someone told me to sudah sudah lah. Stop demonizing TDM.

The issue is still alive. Tun Dr Mahathir has just published an account of the monies received by the government over a number of years. During his tenure as PM, the government received RM168 billion. From 2004 to 2009, PETRONAS gave 253 billion. The upshot of his argument: Pak Lah received more money and was not able to account for the application. Mana itu wang pergi?

Tun Dr Mahathir speaks in the capacity as PETRONAS advisor. It is essentially a ceremonial post. It was meant as a goodwill post for retired PMs to spend their time. If anyone were to occupy it, other than TDM, that post would be inconsequential. If an ex minister were to occupy it for instance, the effect will be so too.

But TDM was PM of Malaysia for 22 years and he is a larger than life figure. For 22 years PETRONAS was directly under him. The PETRONAS president reports to him directly and when they do meet there were 4-eyes meeting. The PETRONAS president will go back and brief the board; this is what the PM wants. If he says, I had a meeting with the PM, and he wants two of you to jump off the sky bridge, there is no way anyone can verify what were actually said. In other words there is no check and balance.

The current PM now wants a check and balance. Hassan Merican has been PETRONAS boss for 15 years. The PM wants to balance the seemingly wide powers enjoyed by the PETRONAS president by modifying the profile of the board. But the CABINET of PETRONAS thinks this as interference in its domestic affairs. It is now carrying a rear guard action and will carry out a protracted battle.

Enter TDM- the larger than life figure. The de facto numero uno of PETRONAS. From fortress PETRONAS which is essentially behaving like a government, the board becomes emboldened because it has TDM as protector. The PETRONAS board knows the present government is not that strong. It also knows that DS Najib is loathed to clash with TDM.

For TDM, PETRONAS is his last bastion to flex similar 'prime ministerial powers'. If PETRONAS likens itself as a government, that analogy confers on TDM a surreal sense of speaking as another PM.

Hence, speaking as PM of PETRONAS, he asks, how did you people spend the 253 billion in 6 years compared to how I spent 183 billion over a period of 22 years? Only an overseer asks another who he sees as subordinate, the latter's conduct. By asking the provocative question, TDM makes it out that our government is answerable to PETRONAS. Perhaps this sense of omnipotent powers derives from the knowledge that PETRONAS has been saving this country. It does so by paying out dividends, royalties, taxes and other forms of payments. Perhaps it is also thinking, it is better at managing its financial affairs than its 'rival' government.

Let us see how it is in PETRONAS land. TDM has been PM for PETRONAS for 28 years. (1981-2009). Maybe the problem which DS Najib is facing with PETRONAS now could have been solved, if he had written to TDM instead of Hassan Merican. I do not think that TDM would give this Omar Mustapha Ong a second glance. But the character of this Omar Ong has assumed larger proportions because he is made out to be seen as a challenge to the autonomy of PETRONAS. This autonomous region in Malaysia called PETRONAS has a PM named Tun Dr Mahathir, the man who made Malaysia what she is today. That simply can't be tolerated. It is impertinence of the highest order.

So, the seemingly simple and as a matter of fact asking how we have spent the PETRONAS money, is highly provocative. TDM doesn't do things without intending to influence the outcome.

PETRONAS with TDM stand in one corner. At the other corner is the current PM. Omar Ong is just the water boy.

We are currently witnessing an ongoing power play on PETRONAS stage. This is what it is actually. The PETRONAS board of directors whose security of tenure depends on the judgment of the PM is playing hardball. When they are doing is to make the PM lose face. The outcome is obvious.

This whole thing about Omar Ong is just a rear guard action by the Hassan Merican and the Board. First to save his own job, having served 15 years as PETRONAS President having the power over death and taxes just like the PM. Heck! He may even think he is the other DPM to PM Mahathir. The real PM wants to balance things up and place his representative there. Why he likes Omar, we don't know. Maybe he sees Omar all the time and sees nothing wrong with this chap. On the other hand he sees good talent.

It seems the PM wrote to the PETRONAS president sometime in May this year appointing Omar Ong to the board. The letter wasn't meant for further deliberations. The president must have taken this matter to the board and the board dutifully said no. We are not privy about the way he conveyed the message. Perhaps it was more like this: - 'guys I hear the PM wants to appoint our friend Omar Mustapha Ong as board member. If we are not careful, you people will be put out to pasture. It will be the end of the world as we know it. Unfettered, unencumbered, we are the other government'.

Imagine the horrors of the other members of the board upon hearing these words. No more first class travel, fat allowances, maybe some business deals, no more cavorting in the Petroleum Club. No more free access to PETRONAS Philharmonic performances.

Hassan Merican has been called twice to see the PM and asked to explain why the appointment has not taken place. He is likely to say, it wasn't his decision, but this board..Dato Sri…

PETRONAS has only one shareholder. It must listen to the shareholder which is the PM who represents the country. Sure PETRONAS is our largest taxpayer, contributor etc etc, but never forget you are not a supra government body.

The other PM, Tun Dr Mahathir has just now posted a provocative article on the amounts of money received over the years.

How was the money applied? During Dr Mahathir's time we see it applied to tangibles. KLCC, Putrajaya, bailing out Bank Bumi, bailing out businesses here and there and undertaking hig profile public relations mega projects. Whether they are frivolous or not, we can debate about the money spent. During Pak Lah's time, where the money went, no one knows. We have nothing to show. Maybe they have been taken up by the intangibles- Islam Hadhari and human capital.

One thing I know, during the good times when the price of oil was good and our earnings were high, we forfeited the chance to balance our budget. We kept on returning deficit budgets year after year. Now, the price of oil isn't that good, the world economy is reeling from recession; we don't have the money to sustain our standard of living.

What happened to the PETRONAS money? The board of directors know. Now, it is said, the BOD must exercise its independent mind and act in the best interests of the country. This is a fallacious argument. It was never 'independent' previously during the tenure of Dr Mahathir and Pak Lah. It has absolute no say, in the matter of how money given to the government was being spent.

Now, if we follow the drift of those supporting that the PETRONAS BOD must be free from interference, are these people suggesting that PETRONAS now enters into a period of activism and will now supervise how money it gives to the government is being spent? I think PETRONAS is not a supra government having jurisdiction as to how its money given to the government is being spent. PETRONAS supervises its own coffers. It answers to its shareholder- the government.

The government on the other hand is answerable as to how it spends the money given them. It answers in parliament and answers to those public spirited and civic minded citizens of this country.

During those times it managed its own coffers were there interferences into their affairs? If there were, then PETRONAS must tell us. If there were, then it is mischievous to insist that NOW PETRONAS must remain independent. It has never been. Now because we have a new PM who is about to embark on his own journey, we adopt this holier than thou attitude. Suddenly we become sanctimonious about it.

Why now, under Najib, the PETRONAS BOD must be endowed with a quality of independence? Well, it wasn't independent those years under Dr Mahathir and 5 years under Pak Lah.

This raises several issues. Are these people telling us that the present PM stays out of PETRONAS but previous PMs were allowed to? That would suggest that DS Najib is not sufficiently competent to supervise PETRONAS but previous PMs were. Well, to most people, Dr Mahathir when he was PM was competent and therefore allowed to determine the BOD. Pak Lah was a mistake and now the present PM is deemed to be the company of Pak Lah. Indeed, it would seem that DS Najib is even worse off- he isn't allowed to come near PETRONAS at all. Somehow, it would seem that DS Najib in terms of managing PETRONAS business is less endowed than say Dr Mahathir?

I think PETRONAS has misdirected itself if it thinks it can be the conscience of this country. That role lies with political parties and is decided in parliament. I don't think we are deficient in the numbers of those wanting to be the voices of conscience for this country. There is no need for PETRONAS to arrogate upon itself such role.

20 comments:

desiderata 4 July 2009 at 11:29  

SakMK: `` GoOD commentary -- may I borrow it for use atDesiderata's? Thanks in advance -- butt no royalty:) YL, Desi

Anonymous,  4 July 2009 at 11:31  

Dato Sak ,

Petronas is not belongs to the Rakyat, but UMNO !!

Looks how its operate..... I would say 98% of employees are all Malays, all Petronas 'Vendor' are Malays !!

The rest of the rakyat (non-bumi) have no concern whether Petronas will be run down to the ground in near future or any person being appointed to BOD or its chairmanship.

Petronas is just another UMNO racist institution just like UiTM.



Dakis

Anonymous,  4 July 2009 at 12:16  

Dato,

Another masterpiece!

In my layman’s view – it all boils down to governance!

Pertronas is a company, managed by a BOD, selected by the PM, who represents the people of M’sia as the Major shareholder.

So as a company, Pertronas must operate to the best of her effort by the BOD, so that it can generate profit, to eventually benefit M’sians.

Is Petronas well-managed? Good time makes money means nothing, especially one is in a position of monopoly. Bad time makes good money proves that the management has really done a good job in running the company. So how is Petronas’s report card show?

Is/was the BOD well selected by the PMs (past & current) so that they r truly independent, to run the company? If based on Dato’s takes, then this is definitely a no-no. So the claim of independency of the BOD is a recent-make, just to counter the move by the current PM. It also meant what Dato has implied – there r two PMs, as far as Petronas is concerned.

R the PMs’ (past & current) efforts in selecting the Pertronas’ BOD really have the heart of M’sia in mind? R they using Petronas as their personal cash-cow? History has proved yes to that claim & it is very unlikely that the current PM will do otherwise, considered the underground rumbling noise about CIMB’s financial health.

The alternative solution is to make Petronas answerable to Parliament, with the BOD select & screen through by a committee of elected MP of both sides of the house. The only catch is whether such an action is too late now, knowing that the oil/gas reserves of M’sia r going to be depleted in less than 20+yr.

If that’s the scene, then whatever discussed here is only academic as there is no way one can stop the tide of Pertamina swapping Petronas! The ultimate losers r the people of M’sia. The fat cats r already well-taken care of! What they r doing now is shadow-dancing for pocket-change & shiok-dirism.

anomie

backStreetGluttons 4 July 2009 at 12:32  

My God , we had expected that baggage-full-of-worms Mr Najib's pretender-PM tenure will be most precarious & as easy as pisang goreng for overseas spy rings and big time ransomers and super-easy fodder for many but HORROR of horrors !

We never expected it to come from cuddly Big Baby Petronas !

True enough as the wise man has said , the greatest enemy is the one nearest to you !

PRAY,IT WORKS. joe's blog 4 July 2009 at 12:38  

The SH'T keeps oozing out of malaysia. mahathir lives long to smell it. He will rue it.

donplaypuks® 4 July 2009 at 13:04  

"PETRONAS has only one shareholder. It must listen to the shareholder which is the PM who represents the country."

Surely that's not correct. The only shareholder is the Nation whose rep is the PM.

My view of the current situation?

Watch heads roll? There's been too cosy an arrangement at Petronas which behaves as though it is a foreign Government and the Chairman/CEO is invincible, untouchable and a kind of demi-God. You defy the ultimate CEO at your own peril.(Remember when Truman sacked the hero MrArthur?).

We can see that many of the ills beseiging our nation have their roots in TDM's 22 years overstay at the helm of the country.

And if we are not careful, that same disease will afflict Petronas. We will end up truly killing the golden goose!

But that still does not mean I endorse Omar Ong being forced upon Petronas. In this instance, Najib has no business pushing this discredited appointment through.

malampaya,  4 July 2009 at 13:20  

Nobody knows for sure what was discussed between all the PMs and PETRONAS' Presidents and Chairmans. I can do my own interpretation and story in order to get my story sounds so convincing like your story but how do we know.

When our nations best PM, TDM asked PETRONAS to do something, he had his own reasons and justification which make sense and for the sake of the country. And he never ask for more from PETRONAS because he understands the nature of petroleum industry – long term planning and capital intensive. He always has back-up plans and he did not rely on petro-ringgit. Pak Lah, being the worst PM and typical government mentality, don’t know what to do and he saw only PETRONAS, being the cashcow company, that can assist him. He was lucky because of TDM didn’t ask for more money from PETRONAS, then PETRONAS can used the excess money to grow and when Pak Lah asked for it, PETRONAS can give it, continue to sustain its operation and even growing bigger.

Back to DS Najib, yes he has the prerogative to appoint any Tom, Dick and Harry to be in PETRONAS since they report directly to him. But please tell us the rakyat the rationale of the decision. All this while, the BOD composition was Government Representative and PETRONAS Executives. Like you mention, BOD is also discharging their duty as to provide check and balance to the PM. They think this guys is not suitable, so they rejected him. Since he holds the power, if he still wants him to be the Board Member, so be it. Cumanya, I still wondering WHY and WHY and WHY? I believe Najib’s plan is more than that…President maybe?

I agree Hassan Merican has been the President for 15 years and he should step down now. But as everybody knows, he has brought PETRONAS to the greatest level. Many would agree with me that PETRONAS won’t be what she is now if not because of his strong leadership. He’s not a person that whenever someone says “Please jump” and he response “How high” instead “Why should I?” Last time he had a strong team with Tan Sri Azizan (It was Pak Lah who did not want to appoint Azizan’s replacement). Hassan was chosen and recommended by Azizan to PM. So give him chance to choose and recommend his candidate so as to ensure the legacy to bring PETRONAS to greater height can be sustained.

Anonymous,  4 July 2009 at 15:02  

if there is any thing good about TDM legacy is that he was instrumental in making petronas what is it today, no political interference and run extremely well, mr hassan merican and the late allahyarham zainal abidin, many people have this wrong impression that all that petronas generate comes from the coast of terengganu and sarawak ,the company operates in half the country in the world and it generates half its income from them, so i suggest that petronas should be accountable to the parliament or a independent council but by all mean let it be independent and be run as any viable private company.

Anonymous,  4 July 2009 at 15:24  

The bigger view is:

UMNO is now gnawing at a company run by Bumiputras. It will also go for other companies 'managed' by Malays.

This is the sure passport for UMNO's downfall.

Remember, how UMNO denied royalties to PAS led Terengganu state government?

That was a classic act of denying Malays in Terengganu from using righful dues (oil royalties) for the rakyat, just because they were from PAS.

Now you see, after having gnawed at the very own ethnic group, UMNO has to bite the hand (PETRONAS) that feeds (props the Federal government spendings).

At the end of the day, the scenario will be:

a. Indians and Chinese, having learnt the hard way at how UMNO (mis)treats them, will have learnt how to fend for themselves without UMNO aid, but giving out regularly to the corrupt UMNO fools who think that it is the only way to become rich and famous'

b. Have-not Malays will look at the 'wealthy' Malays to 'plunder' and 'share the ill-gotten wealth' equitably.

Oh, yes, and the NEP will be a permanent feature in the Constitition of Malaysia.

REALITY CHECK

Anonymous,  4 July 2009 at 15:28  

This holier-than-thou misconception by Petronas Board is a farce. How can ONE new board member cause such havoc to Petronas?

The more reason now for PM to find out on the real reasons for objections instead of the "loan-defaulter" excuse.

Yes, majority of Petronas people are professionals but the majority dont realise the subtle thieves amongst them, the deceit that's going on!

Of course, with less political interference from UMNO warlords, it means the Petronas loot can be subtly shared amongst a privileged few without detection.

Eg: If these privileged few looted nett US3 billion/year indirectly via lucrative oil & gas contracts awarded etc, nobody will realise anything. Many knows white collar deals were done and made to look above board, that simple but billions get stashed somewhere via nominees.

Who are the privileged few? We can only guess but it will be an inner circle within the Petronas team, Mahathir? and the closest allies?.

Somehow this inner circle do not want any outsider to know the details of the looting that has been going on undetected (using sophisticated looting techniques perfected over the last 15 years)

eg: indirect payouts in deals for buying oilfields in Sudan, Egypt, CIS countries etc for US billions in fields originally discovered by others who wish to cash out.(Note: Petronas Exploration arm hardly made it's own large oil and gas discoveries).

Who really know what's inside the oilfields reservoir purchased by Petronas for US billions? Only god knows and reservoir engineers can only guess the barrels available but Petronas surely paid for it!

Yes, these purchased oilfields maybe producing today but we do not know really how long these fields will produce do we? but the payouts for the deals are made upfront.

Sorry for this but a fact is a fact. It is a known amongst those closest, that this President, is a heavy alcohol drinker, who circles himself in private fucntions will similar minded 'indians'. If anyone says this is baseless, proof it.

At the same time, same will dutifully and regularly hold islamic religious sessions like tahlil recitations, doa selamats (prayers sessions), be seen at Friday prayers etc. Why? for show?

Can such a person be called a person of high integrity? Is he deceiving the stakeholders?. if one is capable of getting away with such a deceit for 15 years, doesn't this concern the Board? .

What the PM wants to do is to have check and balance. There must be a reason for this resentment of "outsiders" who has ability to see through the facade.

But again do not get us wrong. Majority of Petronas people are professionals but our concern is the inner circle leadership.

One Petronas VP obtained Datukship after serving hardly 4 years in Petronas but not the peers who are more deserving? How and why? It goes to show that if you suck up to the inner circle, you will move fast and this leads to bad in-breeding. So, process is not transparent here.

Petronas must regularly revamp it's leadership with infusion of outside talents. Don't tell us that a few outside talents can suck Petronas to death. The internal competition will take care and ensure no wrong doings.

The chain of command who sucks to the top and built over the last 15 years must be a huge concern. A few new blood will help to provide the internal competition, which is a necessary ingredient to take Petronas to its next quantum leap. Did we not learn from the fallout of absolute in-breeding?

It's time to make changes to Petronas by adding just a few new blood, starting with the top.The current President himself was an outsider when he came on board. The professionalism and competition will do good to Petronas and as professionals, it is no big deal.

The hua-ha is raised only by a media savvy honcho who is bent on staying for as long as possible, not for Petronas interest but for other reasons only known to those who are hell bent on maintaining the 15 years status-quo. Something is not surely not right.

kuldeep 4 July 2009 at 17:26  

Have anyone here actually looked at the composition and members of the Petronas Board and Management Comm?

Are there better people that can be brought on board?The answer is of cos "YES" but the same goes with Exxon Board as well.Can Mr Omar Ong add value to the Board?The answer is of cos "YES" but so will Dato Sak.One thing for sure the current Board members are credible persons..and have been involved with Petronas for some time.

I would however recommend that ex Esso/Shell seniors such as TS Megat,Datok Saw should be considered as well rather than just Ong and Sak (with due respects)

And who can takeover Tan Sri Hassan's role in Petronas?The person must be someone who is currently in the Mgmt Comm..if Hassan have managed his succession planning well.

Petronas is not a sinking ship thus continuity and incremental improvements are the key AND certainly not the magical turnarounds that keeps on turning round forever.Idris can thus go back to saving Shell from the Enrons.

And the Board should be reporting to a Parliamentary Oversight Comm.The Oversight Comm shld never be allowed to dominate but rather to ensure proper processes/risk mgmt and public policies are not glossed over.

From what I have been told the growth of Petronas in the overseas markets was driven by TDM and the late TS Azizan.TDM opens doors,TS Azizan gets the team to the table and TS Hassan is Mr Reliability that ensures that the correct team executes the vision and opportunities to the max.

So,there is the real concern that someone is selling a new formula:much like Tajuddin's MAS and Pak Lah's GLCs.

cheenabookitmasdai,  4 July 2009 at 19:53  

Dakis,

You are one typical Cina Bukit. You blame everything on UMNO and Malays. So that u can sleep better at night given the fact that u are underpaid and now contemplating selling DVDs or any other pirated goods to improve your standard of living.

You ungrateful moron. Be gone. Nobody would miss you.

Cina Bukit Must Die

Suci Dalam Debu 4 July 2009 at 20:14  

No one can deny that TDM and Tan Sri HM has been responsible for the greatest period of expansion and profitability of Petronas.

As a citizen, I too wonder what had Badawi done with all the money. At least TDM has something to show for it.

Anonymous,  4 July 2009 at 21:40  

Why so complicated? Are we not interested to know the answer to TDM's question?

Fazilis

Anonymous,  4 July 2009 at 22:05  

a good article

http://syedsoutsidethebox.blogspot.com/2009/07/tis-season-to-pukul-habis.html

cina tak de bukit,  5 July 2009 at 17:21  

Of course the empire must strike back as if they don't how are the inner circle going to enjoy their christmas and new years parties in london.As for hassan he has no worries as the vine yard in south africa is still there.

ajoyly 5 July 2009 at 23:24  

The sheriff must be firm in this matter. It should not be deterred from settling it first. Other issues connected directly or indirectly with Petronas should be resolved later.

Anonymous,  6 July 2009 at 08:19  

Dato' kenapa Petronas saja, saya dengar MAS lagi teruk, tapi takda sapa pulak nak condemn.

Ben,  6 July 2009 at 14:57  

Yalah, atok, busuk2 Petronas pun, banyak juga untung dan bagus. Koman2 belum kayap lagi. Udah org semua bising.

Yang dah pasti semakin kayap dan merayap terbang rendah adalah MAS, Kenapa tak dipersoalkan. Tang mana salahnya MAS, supaya tak berjangkit ke tempat lain. Marilah kita kupaskan masalah MAS pulak.

Anonymous,  7 July 2009 at 18:24  

A bit low of you to suggest Hassan Merican and gang are hard-up for the perks in petronas! The majority of Malaysians in case you haven’t realized has but high regards for the present petronas leadership (their lower management of coz is another story). Other than Hassan the rest seemed invisible, but Petronas unlike other govt oilcos Pertamina, etc have delivered, dont you agree!?. Perks like those you mentioned are of small value compared to the damage - had gross mismanagement prevailed. But that coming from you, I quite understand – cheap goods easy to spot!
Not many people are aware about who Omar Ong is, like you seemed to be. Perhaps you would like to elaborate his ‘good talents’. Excuse us if all we see is he crawling down the KJ axis of evil like who’s that guy ….yeah, Patrick! You, I remember admired that dummkopf too.

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