Good times ahead with Petronas
It was almost written so as not to attract attention- State oil firm PETRONAS will award contracts to unlicensed energy services companies to encourage greater competition in the oil and gas industry. That’s new. I though competition is defined as no competition. That definition is in the business lexicon of the big boys in Malaysia.
Example: Gamuda gets a plump deal by way of direct negotiation. Certain people get to operate IPPs by way of direct negotiations. Gamuda gets appointed as PDP. Gamuda is the project manager for the entire MRT project.
Competition in Malaysian business lexicon means NO competition for the big boys- feeding frenzy and free for all fight among the smaller boys. The smaller boys fight for a smaller portion of the business.
The move would be a departure from the current practice where PETRONAS only hands out jobs to licensed players in certain segments such as oil and gas equipment makers and offshore support vessel operators, the report said. Licensed players refer to those registered with PETRONAS after fulfilling certain strict requirements.
What is the purpose of the relaxed rules? So that, intoned the report with the usual strictly business and professional as usual disposition - so that the measures will attract more foreign investment to develop Malaysia as a regional energy hub, it added.
As though in anticipation of protests from pressure groups and other economic pressure groups, PETRONAS went on to quickly said such moves would expose local energy services companies such as Malaysia Marine and Heavy Engineering Holdings Bhd , Kencana Petroleum and Ramunia Holdings Bhd to competition.
Competition is good says the conventional wisdom. As we shall see, there is no such thing as conventional wisdom as far as PETRONAS is concerned when it comes to competition. In so tender tones, PETRONAS further added that the change would not apply to the bumiputra vendor programme, where companies controlled by ethnic Malays are given preference under a policy aimed at redistributing national wealth.
This is where there are no such things as conventional wisdom. The big boys such as Kencana and Sapura are not exposed to competition. They are given super preferential treatment. Who did PETRONAS select to partner with Petrofac to develop the not easily defined marginal oil fields? Kencana and Sapura.
Everyone knows in the market, Kencana and Sapura are big at group levels only. The operations are mostly handled by their subsidiaries working with sub-contractors. Almost all of these are running inefficiently and incurring delays and so forth. That’s translated into additional costs to PETRONAS in terms of time, delayed costs and even additional direct costs.
How does PETRONAS handle those contractors operating through subsidiaries belonging to Kencana and Sapura? They practise what in banking circle is known as banker’s dilemma. If one owes the banks small amount they will come to you with brass knuckles. If one owes them super large amounts, the defaults of which can cause banks to keel over, they will treat you as the GROs do the well-heeled customers. They will treat you with extraordinary hospitality. Sit on your laps, let you fondle strategic places and so forth.
So in order to prevent Kencana and Sapura from keeling over and dragging with them PETRONAS to the bottom of the sea, PETRONAS awards Kencana and Sapura with MORE contracts. Its good money chasing after bad money. Lend more so that the borrower can secure more business. So that these people make more money and remain solvent and can help finish the PETRONAS projects. PETRONAS has even resorted to paying subcontractors directly bypassing Kencana and Sapura.
Our much heralded captains of the oil and gas industry, Mokhzani Mahathir and Shahril Shamsudin are big figures at group levels. What will they gain when Sapura and Kencana teams up and then develop the marginal oil fields?
Read carefully ya. Mokhzani stands to gain RM 400 million while Sahril Shamsudin stands to gain RM 440 million.
Man, the new economic model so loved by our PM and lovingly supported by the Messrs. Idris Jala and the Pemandu guys and the ETP guys is a boon to the big boys.
Meantime, Alfred in the kampungs and Felda schemes will say- what? me worry? We get RM 300, 3000, 500 cash what?
17 comments:
Dato,Petronas has been a cash cow to the ruling elite especially Mahathir's family.In other words it is their personal piggy bank.Who bailed out the bald headed guy when his shipping company was going to the dogs.
As long as Dr M has a say in the company,do not expect changes for the better soon.Old habits do die hard.These people are so damned rich,and they still want some more.What are they going to do with so much money.Have scores of mistresses.Then they will have to order the diamond shaped pills in crates.But thet have to be very careful for their health,or else one day they might just dropped dead with the beauty on top of them.
Dato,with the projected date 2020 slowly approaching,the problem is not whether we achieved developed nation status.The main problem is with Petronas's oil reserves depleting slowly each day,and the robber barrons hands still in the cookie jar,the question is whether it will still be solvent when 2020 arrives.
it's called the blue wave strategy la dato'
Dato'
Mahathir reportedly rationalized the building of Petronas Twin Towers for Malaysia as akin to a short person standing on a soap box to be seen and heard.
And Malays need icon entrepreneurs and who are better than his sons and close associates to be icons? Without these icons the ordinary Malays will be without direction.
So, this ex-PM will continue developing icons in his important role as adviser to Petronas.
All praise to Ayahanda Tun.
To enable the robbing to go on, BN and Mahatir confuses the people with issues like hudud, alleged muslim conversions, sex this and that, kampung buah dadas etc. All these to confuse and to allow the super rich to continue to go on to be ultra rich. All these whilst the oil reserves drop 10% a year! What will be left when there are no reserves will be a failed state ala Pakistan I forsee. Mahatir's children will have so rich and full that they would not care less. In fact they are all so greedy and rich that they fail to see what the rakyat has to endure day in and day out. Simple example - try taking a bus in Klang and you will see what I mean.
Have to please him (Ex Pee Em) otherwise all hell will break loose on the current PM.
Dear Dato'
Both of those figures are closely related to the nefarious Dr. Mahathir. Furthermore, it seems that the Govt continues to pay to this day RM 1 billion to redeem Danaharta bonds. These are all parts of the 'Maha tax' which should amount to RM 2-3 billion a year. The 'Maha tax' represents transfer of wealth from public to those closely related to Mahathir. The reason the tax continues to this day because unfortunately Malaysians are divided along ethnic lines, so the Malays need to find a defender of last resort. The defender being the Mahas need to be paid. End result, Chinese is happy cos they will have to be the subcontractor to these incompetent Mahas, Maha's are happy cos they get free money and the Malays believe their rights are protected.
How can you argue with that?
It's time for us sleeping malaysians to say "no more". Have an order to string this buggers up for robbing and raping the country dry!Have a seperate court of justice for all these crooks.....oh! we wish this country is CHINA ! A quick trial and then to the courtyard for punishment.Line them out to the streets and shame them and finally you know what?????
This umno lites should be taught and treated like scums.
When asked why was Gamuda given a direct nego PDP with a 7.5% Swiss Challenge advantage ( worth RM 500 mil) . . . he answered "legacy issues".
Nudge2wink2 say no more.
that's it, that explains everything? wow......
The rakyat can starve and fight over non issues, and these people don't care a damen, they are busy jostling for more projects and get more money, but can they and their children and grandchildren spend all of it? Don't forget one thing. GOD is watching every move of ours. These people and every one will have to face Him and answer to Him. Let God do the job for us.
This is also the same with Syed Mokthar. Stop giving him companies to take over, the banks will keel over.
The munafik-ation continues......hahaha...
But when one's mind is clouded by only religious rituals and race supremacy, every other things becomes secondary... and one continue to suffer the curse of "munafik-ation"
Dear Sakmongkol
It looks like the lessons of the Arab Spring have not been learned here. Or are our people so docile that they will never rise up to toss out these robber barons?
National unity and social cohesion require us to pursue affirmative action programmes to help the less able ones – the Alfreds or Alis or Muthus in Felda schemes or in rubber estates. These unfortunate people, for whom 54 years of economic development and countless economic plans and policies have done little to lift them out of relative poverty, must be helped by the rich resource largesse of our nation – the billions of Petronas money now channeled to a few well-connected cronies.
Can it possibly be true that the long-term welfare of 40% of Malaysians rank lower than the need to make several Malays undeservedly rich merely to serve as symbols of Malay success? I think if we use that Petronas money intelligently to build social and physical infrastructure in rural areas it would help Malay, Bumiputra and other deserving Malaysians much more. We need to use that money to teach all these Malaysians to fish and give each a fishing rod. Those few greedy cronies have benefited enough already.
I guess the objective of liberalization is to increase options, build diverse capability and get the best deal of highest delivery at lowest price for the rakyat.
Which is why it is hard to fathom how come each time the present govt says it is liberalizing a sector, the companies which get the contracts that follow have as shareholders faces linked to the govt and its political leadership.
It's like saying you can have any banner you like so long as it is an Umno crony.
This is not good for the country because it implies that Umno is the standard-bearer of government-linked business operations. Looking at the way it has run this country and its future into the ground, hardly.
Why Kenchana and Sapura, one asks? What's so special about these companies? If the contract has been cut because they have the capability, how did they get the capability in the first place? Was it because they had gotten earlier contracts which enabled them to get loans to buy hardware and recruit experts in order to execute the projects? If that be the case, why not give out the contracts to other smaller newer companies so that they can also do the same? Come up and compete to provide better deals in the market in the future.
After all, if Kenchana and Sapura had started from naught, no less can those others. Yes?
Is it otherwise because these newer companies don't have the right connections? But surely having the right connections alone is precisely against the grain of what liberalization intends?
In fact it reinforces the danger of another MM-TR MAS-type arrangement where a govt uses its office to politically and secretly appoint a business proxy to run a public concern.
Let's say the newer smaller companies may not themselves be able to do all the tasks in the contract. They can aggregate amongst themselves for division of labour, taking less profit in proportion to their contribution. Better than nothing.
Let's also say these companies are all malay-owned but don't have enough technical expertise in some areas. They should not be constrained by Petronas' bumi-policy from hiring or joint-venturing with others to make the best delivery.
That would in fact show that things in the ground which belong to the country belong to the rakyat who are not artificially divided out by race cloaked as income disparity distorted by data supplied by apparatchiks.
Rather than have Kenchana and Sapura get one big deal, give it to the a's to z's so that they can come up, in which process spreading the wealth away from the mahathir dynasty. In fact, all dynasties.
After all, if one already has a billionaire in the family, why continue to inflict conflict of interest in the domain of GLC contracts on the rakyat and nation?
My lifeforce is waning so i am not writing well. Sorry.
Dear All,
Why bother to comment on Sapura-Kecana (SK) deal, when there are so many others who are as rich as them getting contracts via backdoor from Petronas. S-K has delivered so far delivered their commitments to the contracts. Those who secured contracts backdoor and not able to deliver on time are the ones we should be bothered because it cost Petronas VOs.
With the latest news in the Edge newspaper is something that all service providers to the oil and gas industries should be worried about. If it is true, then most service providers will 'bungkus'and engineers will be booted out of the business. A change in policy by Petronas and endorsed by the government will erode the local service providers. Not all service providers 'makan commission ma' Some are truly building up the business with engineering capabilities, human resource development, and asset expansion in the business but to Petronas, the Mat Salleh is still the best. To Petronas locals irrespective of race or religion is still a screwed up fraternities. Of course local companies tend to make some mistakes but it is a learning curve, but at the end of the day they still deliver. So whatever you say or comment on S-K deal I am still proud of the achievement made the company.
Just to share this...
"I care not what puppet is placed on the throne of England to rule the Empire.
The man who controls Britain's money supply controls the British Empire and I control the British money supply" - Nathan Rothschild said (1777-1836):
"The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class." - Mayer Amschel Bauer Rothschild
Rockefeller is reported to have said: "Competition is a sin". "Own nothing. Control everything".
Because he wants to centralize control of everything and enslave us all...
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning" - Henry Ford
You be the judge.
Shalom.
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