Sarawak unhappiness with Petronas on display at transfer ceremony

THE undercurrent of Sarawak’s anger towards Petronas was on show at a domestic gas signing ceremony – transfer of stewardship of the distribution of domestic gas to state oil firm Petros – in Kuching today.

Deputy Chief Minister Awang Tengah Ali Hassan pulled no punches when he described speeches made by Petronas president and group CEO Wan Zulkiflee Wan Ariffin and Petros chairman Hamid Bugo as full of niceties.

Source: https://www.themalaysianinsight.com/s/218626

Bidayuh oil and gas veteran picked as Petros CEO, industry sources say

OIL industry veteran Saau Kakok is expected to head Sarawak-owned Petroleum Sarawak Bhd (Petros) after months of searching for a chief executive officer, industry sources say.

Saau, who was former special projects vice-president for Asia of the US-based independent oil company Hess Corporation, is the man Sarawak Chief Minister Abang Johari Openg has headhunted for the job and was not among the numerous applicants for the post, they said.

The 64 year-old is one of only a handful of Bidayuh oil and gas executives holding very senior positions in a multi-national petroleum company.

According to his profile on his LinkedIn page, he resigned from his vice-president position at Hess at the end of last year.

Abang Johari on Sunday said he has found “the right person for the job” and gave only one hint – that the person was a Bidayuh with experience in oil and gas industry.

The Bidayuh are the second largest of state’s ethnic tribes.

Petroleum-rich Sarawak formed Petros last year amid long-standing unhappiness over the 5% oil and gas royalty the state receives from the federal government. Sarawak has been demanding that the amount be increased to 20%.

The state government said Petros would be of “equal status” as national oil company Petronas and was meant to protect Sarawak’s interest in the industry by allowing it to participate in upstream oil and gas development, particularly in the exploration and extraction of oil and gas within Sarawak waters.

Oil and gas executives have told The Malaysian Insight that Saau was indeed picked for the job as the native of Ulu Padawan, located just outside Kuching the state capital, was a person with vast experience in the industry.

“It’s Saau. We are positive it’s him as he has been having a few meetings with Petros board chairman Hamid Bugo over the position this week,” an executive said.

Saau joined Hess in 2011 as vice-president of global new business development.

He completed his tertiary education at University of Malaya, graduating with honours in a Bachelor of Engineering degree in 1977.

Like many Sarawakians, he first joined the oil and gas industry via Shell.

His LinkedIn page stated his last position at Shell as vice-president of Shell EP International Ltd, a position he held from 2007 to 2009.

In Hess, Saau has held several positions including vice-president for Asia-Pacific, as a director in Hess Malaysia and Thailand Ltd, in Hess Oil & Gas Sdn Bhd and in Hess (Indonesia-South Sesulu) Limited.

He was with the London-based Hess (Indonesia-South Sesulu) Ltd from January 2014 to December 31, 2016.

Wilfred Nissom, one of his former teachers at the Dragon Secondary School (later renamed SMK Tun Abdul Razak), described Saau as “very sharp but quiet and humble”.

He also remembered Sauu as being a good athlete who had represented the school as a long-distance runner in inter-school sports meets.

The Malaysian Insight was also told by industry sources that the “humble” Saau had expressed that he was not good enough for the job and had asked Hamid to look for someone else.

Last November, Hamid said the Petros board was in the midst of screening 40 applications for the post that was advertised in local and national newspapers.

The other members of the Petros board are Bintulu Port Holdings CEO Mohammad Medan Abdullah, Sarawak Energy Bhd CEO Sharbini Suhaili, former Shell Gas & Power Malaysia managing director Heng Hock Cheng and Sarawak Public Works Department director Zuraimi Sabki.

All of them had served in various capacities in the oil and gas industry. – February 14, 2018.

Source: https://www.themalaysianinsight.com/s/37884

Sarawak BN must fight for Miri, says Abang Johari

SARAWAK’S Barisan Nasional (BN) components must go all out to recapture the Miri parliamentary seat, a former BN stronghold that was lost to the opposition in 2013, in the coming 14th General Election (GE14).

Chief Minister Abang Johari Openg said with all four BN component parties – Parti Pesaka Bumiputera Bersatu (PBB), Parti Rakyat Sarawak (PRS), Progressive Democratic Party (PDP), and Sarawak United People’s Party (SUPP) – now fully recovered from their embroilment in internal conflicts, chances of winning back the Miri parliamentary seat seemed bright.

“We must win the Miri parliamentary seat so that we can develop it together for the future generation,” he said at the Chinese New Year Dinner organised by the SUPP Miri and Sibuti parliamentary liaison committee last night.

Abang Johari, who is also the state BN chairman, said the Miri community must think rationally during GE14 as it would determine the future of Miri.

“All four leaders in Sarawak’s BN component parties are Sarawakian. We will protect the state rights based on the constitution,” he said.

SUPP Miri and Sibuti parliamentary liaison committee chairman Lee Kim Shim said SUPP had formed an election committee for GE14, with election machinery ready to move once the campaigning started.

“Together with our component parties PBB, PRS, and PDP, we will make sure that we win back the Miri parliamentary seat,” he said.

On another issue, Lee, who is state assistant minister for tourism, arts and culture, hoped that the state government would study the possibility of turning the Miri River winding from Pullman Hotel to Kampung Wireless to be turned into a waterfront that could attract tourists similar to the Kuching Waterfront.

He also appealed to the chief minister to consider making Miri City the headquarters of Sarawak-owned oil and gas company, Petroleum Sarawak Berhad (Petros).

“Miri has been the centre of the oil and gas industry for over hundreds of years. It is hoped that Petros will play an active role in developing the oil and gas industry in Sarawak, particularly in Miri, creating more jobs and opportunities,” he said. – Bernama, February 19, 2018.

Source: https://www.themalaysianinsight.com/s/38641

Possible for Kuching to have piped gas in 10 years

HOMES and industries in Sarawak’s capital city, Kuching, could have piped gas within the decade, state oil firm Petroleum Sarawak Berhad (Petros) chairman Hamid Bugo said today.

He, however, said it needs “the right and skilled” labour force.

Source: https://www.themalaysianinsight.com/s/218632

Venezuela launches oil-backed cryptocurrency

VENEZUELA formally launched its new oil-backed cryptocurrency yesterday, in an unconventional bid to haul itself out of a deepening economic crisis.

The leftist Caracas government put 38.4 million units of the world’s first state-backed digital currency, the Petro, on private pre-sale from the early hours.

During the first 20 hours of the pre-sale, which runs through March 19, Venezuela received “intent to buy” offers to the tune of US$735 million (RM2.9 billion), said President Nicolas Maduro.

“The Petro reinforces our independence and economic sovereignty, and will allow us to fight the greed of foreign powers that try to suffocate Venezuelan families to seize our oil,” he said.

A total of 100 million Petros will go on sale, with an initial value set at US$60, based on the price of a barrel of Venezuelan crude in mid-January – but subject to change.

Economist and cryptocurrency expert Jean-Paul Leidenz told AFP that prices during the pre-sale “will be agreed privately” and would then fluctuate according to the market when the initial coin offering of 44 million Petros was made on March 20.

Meanwhile, the government will reserve the remaining 17.6 million Petros.

Venezuela has the world’s largest proven oil reserves, but is facing a crippling economic and political crisis.

Vice-President Tareck El Aissami said the Petro would “generate confidence and security in the national and international market”.

Maduro announced in early December that Venezuela – which is under sanctions from the US, as well as the European Union – was creating the digital currency.

The Venezuelan leader said he expected the Petro to open “new avenues of financing” in the face of Washington’s sanctions, which prohibit US citizens and companies from trading debt issued by the country and its oil company, PDVSA.

But, experts are sceptical about the Petro’s chances of success, pointing out that the country’s deep economic imbalances would only serve to undermine confidence in the new currency.

“Theoretically, with cryptocurrencies, you could bypass the US financial system… but everything depends on generating confidence,” said economist Henkel Garcia.

Meanwhile, consulting firm Eurasia Group estimates that although Venezuela could raise some US$2 billion in the initial offer, it is “unlikely” that the Petro will be established as “a credible means of exchange”, beyond short-term “interest”.

Venezuela is mired in a deep economic crisis triggered in large part by a fall in crude oil prices and a drop in oil production, which accounts for about 96% of the country’s exports.

It is struggling to restructure its external debt, estimated at around US$150 billion by some experts. – AFP, February 21, 2018.

Source: https://www.themalaysianinsight.com/s/39016

Political party pledges to dog Sarawak CM on pledge to return rights

A NON-ALIGNED Sarawak political party says it is closely monitoring the actions of Chief Minister Abang Johari Openg following his pledge to get Putrajaya to return all the state’s lost autonomous rights as spelt out in the constitution and the Malaysia Agreement 1963.

At the launch of state-owned petroleum company Petroleum Sarawak Bhd (Petros) on March 6, Abang Johari had said the state  would “assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in Sarawak” by July.

That was understood by many in Sarawak to mean that national oil company Petronas has lost its absolute right to mine and develop oil and gas in the state.

Abang Johari had said the state retained its rights to oil and other resources even after Malaysia Day.

The chief minister in later statements had also said the two laws, the Petroleum Development Act 1974 – a law that gives Petronas all prospecting rights to mine and develop oil and gas in the country – and the Territorial Sea Act (TSA) 2012 had violated Sarawak’s rights in the federal constitution and was also legally null and void as it had also never been ratified by the state legislative assembly.

The TSA reduced the state’s sea boundary from the normal 12 miles to a mere 3 miles, an act seen by Sarawakians as a move by the federal government to seize the state’s oil and gas fields offshore.

Parti Bansa Dayak Sarawak Baru (PBDSB), whose political agenda is the advancement and protection of the Dayaks – the state’s largest communal group – said there should not be any further excuses in prolonging the recovery of those lost rights.

“We want him (Abang Johari) to hold on to the promises he had made,” party president Cobbold John said today.

PBDSB is not a member of the Barisan Nasional ruling bloc nor the opposition Pakatan Harapan.

Cobbold said if Abang Johari’s legal arguments are right, then there should not be any “obstacles in the way of Sarawak’s autonomous rights to be returned, as how it was initially stipulated legally in Malaysia Agreement 1963 (MA63)”.

He also suggested Sarawak lawmakers pore through in detail all the amendments that had been made and take the necessary actions if the federal government had violated the state’s rights or what were agreed in the MA63.

“As such, PBDSB shall continue to monitor and voice out where necessary on Sarawakians’ rights, especially when promises for such rights was made by the chief minister openly.

“PBDSB shall hold on to the promises which was made not only by the Sarawak chief minister but the entire Sarawak state cabinet and assemblymen to ensure that Sarawak has its rights returned as promised.” – March 22, 2018.

Source: https://www.themalaysianinsight.com/s/44389

Not true that Sarawak has reclaimed oil and gas rights, says opposition

SARAWAK opposition leaders have challenged the chief minister’s statement that the state has reclaimed its oil and gas rights, saying federal laws ensure the resources remain in Putrajaya’s hands.

They said the state cannot regain the rights when laws like the Petroleum Development Act 1974 (PDA), Territorial Sea Act 2012 (TSA) and Tripartite Agreement, signed by the federal government, Sarawak government and Petronas, have not been repealed or rescinded.

“How can we assert those rights that are constrained and/or no longer in our hands?” said state PKR vice-chairman See Chee How, in response to Abang Johari Openg’s statement at the launch of state oil company Petroleum Sarawak Bhd in Kuching on Tuesday.

The PDA vests in Petronas the entire ownership of, and exclusive rights, powers, liberties and privileges to, the exploration and exploitation of the country’s petroleum resources, both onshore and offshore.

The law gives the national petroleum company complete control in carrying out downstream activities and developments relating to petroleum and related products.

See said the PDA “has completely taken away all our rights, power and privileges over the petroleum resources deposited and found within the territorial boundary of Sarawak”.

The TSA limits the state’s sea boundary and territorial jurisdiction to a mere three nautical miles offshore.

Sarawakians have longed accused the federal government of passing the law to plunder the state’s offshore oil and gas resources by limiting the state’s control to the exploration, exploitation and obtaining of all resources found in Sarawak’s territorial sea, which should have been extended up to 300 nautical miles.

The Tripartite Agreement is purportedly “to irrevocably grant in perpetuity, and convey to and vest in Petronas” Sarawak’s ownership, and the exclusive rights, powers, liberties and privileges of exploring, exploiting and obtaining petroleum onshore or offshore.

See, who is also Batu Lintang assemblyman, said the chief minister “appears to be overly excited and exceedingly optimistic about the indefinite and ambiguous assurance of the prime minister (to return state rights)”, while state DAP chairman Chong Chieng Jen described Abang Johari’s announcement as “much ado about nothing”.

See said the chief minister has “gone overboard with an announcement that may not materialise”.

“With his eyes trained on the next general election, the assurance by the prime minister was vague, and clearly uttered to placate Sarawakians and Sabahans.

“The insincerity of Putrajaya is evidenced by the fact that, until today, the prime minister has yet to get back to Sarawak on the reference made to his office by our late former chief minister, Adenan Satem, to repeal or amend the TSA in 2016.”

He said there has been no progress on the devolution of powers to Sarawak since Adenan died.

“To assert our sovereign power and rights to the issuance of permits and licences for mines, mining leases and certificates under Item 2(c) of the State List under the Ninth Schedule of the federal constitution, in this case, the prospecting, mining and development of our petroleum resources, the federal government must first agree to repeal the TSA and PDA, or make amendments to their provisions, and the Tripartite Agreement signed between the federal government, Sarawak government and Petronas must be rescinded.

“The chief minister must first obtain the assurance and undertaking of the prime minister to repeal the TSA and PDA, and to rescind the Tripartite Agreement, before he can make the announcement that we are now able to exercise our jurisdiction under our Oil Mining Ordinance, with regard to the licensing of oil and gas exploration, exploitation and development.

“Unless all these laws and legal provisions are repealed or amended, to devolve or vest powers back to Sarawak, we are, in effect, powerless.”

See said the announcement by Abang Johari that Sarawak is now able to exercise administrative and regulatory control over all petroleum-related activities in the state is “superficial at best”.

Chong said Sarawak’s entitlement to oil and gas royalties remains a meagre 5%.

The state Pakatan Harapan chairman and Bandar Kuching MP said unless the provisions of the PDA are amended or repealed, whatever laws or regulations passed by the state assembly or set by the state government “will become redundant and ineffective”.

He said the chief minister’s announcement was just another one of his “hot air” stunts, “trying to fool Sarawakians into believing that there is the devolution of powers, when the main control over, and benefits of, oil and gas remain with the federal government”.

“Barisan Nasional has taken Sarawakians for a ride for the past 55 years, and with this perceived devolution of powers, it intends to continue taking Sarawakians for another ride for another 50 years.”

Parti Bansa Dayak Sarawak Baru president Cobbold John questioned how the state could reclaim its oil and gas rights if “Petronas is being allowed to operate as usual”.

He accused Abang Johari of manipulating the Malaysia Agreement 1963 and state rights for political benefits.

“These two laws (the PDA and TSA) need to be amended. Only then can the state assert its constitutional power.”

DAP’s pick for the Stampin federal seat in the 14th general election, Kelvin Yii, said Abang Johari’s announcement “seems to be purposefully orchestrated to mislead the public with regard to the control of our oil and gas resources”.

“Unless there is a repeal or amendment of the PDA, the oil still belongs to the federal government under Petronas, and we are entitled to only a 5% oil royalty.”

The chief minister, in an interview with TV station Astro Awani this morning, said the state’s right to its oil and gas is guaranteed under the federal constitution.

He said even though Item 8(j) under the Ninth Schedule of the constitution grants to the federal government the development of mineral resources, mines, mining, minerals and mineral ores, oils and oilfields; purchase, sale, import and export of minerals and mineral ores, and petroleum products; and, regulation of labour and safety in mines and oilfields, there is a condition.

The condition is that, all those rights are subject to Item 2(c) in the State List, where permits and licences for the prospecting of mines, mining leases and certificates are the rights of the state.

When asked about the PDA and TSA, Abang Johari said under Article 4 of the federal constitution, laws that are inconsistent with the constitution are void.

On the TSA, he said: “Our boundary when we formed Malaysia was 12 nautical miles. It is still 12 nautical miles. It cannot be changed under Article 2 of the federal constitution unless it is agreed to by the state legislative assembly and the Conference of Rulers.”

The state legislative assembly has never agreed to the change. – March 7, 2018.

Source: https://www.themalaysianinsight.com/s/41638

Malaysia’s debt profile can mitigate currency, interest rate shocks

MALAYSIA’s debt profile, mainly funded by the ringgit, acts as mitigation against currency or interest rate shocks.

Moody’s Investors Service sovereign risk group assistant vice-president Anushka Shah said the debt profile factored in Malaysia’s A3 rating.

“The rating is underpinned by strong growth, large and diverse economic structure and ample natural resources. Malaysia is also one of the fastest-growing A-rated sovereigns,” she said at Moody’s Media Roundtable: Inside Asean – Spotlight on Malaysia, in Kuala Lumpur, today.

However, Anushka said, there were concerns Malaysia’s government debt to gross domestic product of about 51% was higher than the 41% median of other A-rated sovereigns. 

“Other concerns include the declining growth rate of the working-age population and downside global risks such as trade protectionism,.

Anushka said Malaysia’s large buffer of foreign-exchange reserves could also mitigate external vulnerabilities.

“The government is maintaining its fiscal deficit reduction stance and committed to a reform policy agenda,” she said.

On the impact of 1Malaysia Development Bhd debts on the country’s rating, she said, the current probability of debt crystallisation from 1MDB was low and was not viewed as a risk to Malaysia’s fiscal position.

Meanwhile, on Petroleum Sarawak Bhd (Petros) starting oil and gas (O&G) exploration this year, Moody’s vice-president Vikas Halan said it was too early to quantify the impact.

“We do not how this will pan out but we see that Petronas won’t be much impacted. It is too early to say but our base case is no change in legal status of Petronas as the exclusive explorer and owner of the (oil) resources,” he said. 

Sarawak Chief Minister Abang Johari Tun Openg recently said Petros would kickoff its exploration activities in Miri this year after the state assumed full regulatory control over both upstream and downstream O&G activities. 

“For us, it is wait and see (the impact). Moving forward, all exploration will come under this company but nothing that Petronas is producing will go away,” said Vikas, adding that, it would be better to have an open industry. – Bernama, March 21, 2018.

Source: https://www.themalaysianinsight.com/s/44310

Oil royalty issue won’t sway Sarawak voters, says Uggah

BARISAN Nasional is confident that the issue of oil royalty harped by Pakatan Harapan ahead of the 14th general election will not sway voter sentiment in Sarawak, said Douglas Uggah Embas.

The deputy chief minister said the promise to grant 20% royalty to Sarawak was an old one that was recycled by the opposition.

“This is an old issue, full control over the oil and gas industry in Sarawak has been given to the state government, we will get returns of more than 20 per cent (of the royalty),” he said after officiating the rabies mass vaccination programme in Miri today.

Uggah, who is also Parti Pesaka Bumiputera Bersatu (PBB) deputy president, said voters in Sarawak were wise enough to judge for themselves the state government’s efforts of reclaiming Sarawak’s rights as stipulated in the federal constitution.

On Tuesday, Chief Minister Abang Johari Openg announced that Sarawak would assume full regulatory control over the state’s oil and gas industry by July as part of the devolution of powers from the federal government.

Abang Johari made the announcement when he launched Petroleum Sarawak Berhad (Petros) and assured that Sarawak would exploit its natural oil and gas resources as provided for under the federal constitution.

He said the devolution of powers was in keeping with the agreement by Prime Minister Najib Razak to return to Sarawak the powers provided for in the Malaysia Agreement 1963 that had been inadvertently eroded over the years.

Sarawak Pakatan Harapan chairman Chong Chieng Jen, when launching the first phase of the opposition pact’s GE14 manifesto recently, was quoted as saying that the coalition would increase the oil royalty for Sarawak to 20% should they win the election. – Bernama, March 11, 2018.

Source: https://www.themalaysianinsight.com/s/42392

Sarawak CM hints of plans to claim more oil, gas revenue

CHIEF Minister Abang Johari Openg has given another hint that Sarawak will muscle in to claim more revenue from oil and gas for its coffers.

“I already have ideas (on generating more income), but I cannot reveal them today,” said Abang Johari, who is also president of Parti Pesaka Bumiputera Bersatu (PBB), the second-largest party in the ruling Barisan Nasional coalition, when jointly opening the PBB Women and Youth wings’ triennial delegates’ conference in Kuching today.

“We have oil, we have gas, but we only see other people benefiting from them,” he said in an apparent reference to the Petroleum Development Act 1974 (PDA), which takes away gains from the two valuable resources from the state, and the highly contentious royalty payment arrangement, where the federal government gets 95% of revenue from the state’s oil and gas.

The PDA, a law passed by Parliament, gives Petronas the sole right to the exploration and exploitation of oil and gas, whether onshore or offshore, and “the entire ownership, and exclusive rights, powers, liberties and privileges” relating to the resources.

Having already demanded that state gets an increase in royalty to 20%, Abang Johari has spoken about plans to curtail the national petroleum company’s unbridled operations in Sarawak.

They include making Petronas obtain mining permits, as the rights to issue mining leases still rest with the state under the Malaysia Agreement 1963, and the formation of Petroleum Sarawak, a state oil company “to look after the interests of the state”.

Sarawak has also demanded that it gets the first right of refusal in any new development of oil and gas fields.

Abang Johari said he was “very confident” of making Sarawak a developed state by 2030.

“We have set a target. We can meet that target if our revenues are increased… so that we can better develop our cities and rural areas.”

He said this confidence was the reason why he dared disclose plans to build mega projects, like the light rail transit for Kuching and Samarahan, the building of an “internet backbone” in rural Sarawak and the building of a water grid without federal assistance.

The water grid, which involves laying a huge water main through the entire length of the state, could cost between RM7 billion and RM8 billion.

Abang Johari said when such major infrastructure was in place, “then, we can call Sarawak a developed state”.

Gerald Rentap Jabu, the son of former deputy chief minister Alfred Jabu, takes over the helm of the PBB Youth wing from Works Minister Fadillah Yusof, who has stepped down due to his age.

State Welfare, Community Wellbeing, Women, Family and Childhood Development Minister Fatimah Abdullah has been made president of the party’s Women’s wing after Empiang Jabu, who is Gerald’s mother, stepped down after 11 years at the helm.

Both Gerald and Fatimah won uncontested. – February 9, 2018.

Source: https://www.themalaysianinsight.com/s/37040

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