Malaysiakini Letter

To be credible O&G player, Petros must lay out plan

Santhia Panjanadan  |  Published:  |  Modified:

LETTER | It has been over one-and-a-half years since the announcement to set up Petroleum Sarawak Berhad (Petros) was made and till today, no specifics have been released by the Sarawak government nor by its Chief Minister Abang Johari Tun Openg.

Further, as days go by, more and more looming questions emerge such as what would be the initial paid-up and working capital the Sarawak state government will inject to get Petros operational and who will constitute the senior management.

This besides the grand announcement of Saau Kakok, a former special projects vice-president of US-based independent oil company Hess Corporation being appointed as the chief executive officer (CEO) of Petros.

To recap, Abang Johari, when announcing the setting up of (Petros) back in 2017, said, “Petros is expected to be in operation within six months because we must get our side ready for us to get involved in the upstream oil and gas (O&G) activities”.

He was also quoted as saying that Petros needs expertise and thus the state government's approach must be correct, saying, "The one I’m talking about is our own state-owned company which will work together with Petronas.”

Following that, the news of the appointment of Saau Kakok was announced despite very strong interest from numerous applicants for the post.

The chief minister was quoted as saying that Saau, a Bidayuh, had spent almost 40 years in the oil and gas industry and his experience, professionalism and network within the oil and gas fraternity made him an ideal choice to lead a competent and high-integrity Petros operational team.

It is then perplexing that Petros has chosen to maintain an elegant silence on calls to be transparent on its negotiations with Petronas or any other party to “reclaim” the state’s right to regulate and develop its O&G resources from Petronas.

Neither Saau nor his team has weighed in with an experienced and professional opinion on increased oil royalties for the state or even attempted to offer a commercially-viable method of calculating it for the benefit of Sarawak and the nation’s oil and gas industry.

Petronas’ track record since it was incorporated may have given ordinary people and even state politicians a mistaken perception that the O&G business is easy and provides very good returns. Nothing can be further from the truth, of course.

If the GPS government and its politicians think that this is so, they need to be educated by Petros and its very experienced board members including Hamid Bugo the chairperson, who is also a director with Sapura Energy, Medan Abdullah who is ex-Petronas and Sharbini Suhaili who is Sarawak Energy CEO and also ex-Petronas.

The business is cyclical, highly capital-intensive and high-risk. Sarawak should already have an inkling of that from the participation of the state-owned Sarawak Economic Development Corporation (SEDC) in a venture called Blackgold in the 1980s under the administration of the Taib Mahmud government.

The venture never took off but the corporation and ultimately the state lost tens of millions of ringgit of the Sarawak people’s money perhaps even more.

Urgently now, the burning question for Sarawak is whether setting up Petros is any less of a business risk or perhaps a much bigger one.

And if the state wants to now start from scratch, how steep a learning curve will it be for it and the executives hired by Petros before any real profit comes to Sarawak’s coffers and the people?

Or will it be another Hollywood production where cronies and opportunistic foreign companies with vested interests embark on an oil field grab and virtually nothing goes back to the people of Sarawak?

Petros has been entrusted with a heavy responsibility by the current state government.

The previous Adenan Satem administration was against such a move. It is now incumbent upon Petros and its experienced and professional management team and board to lay out its plans on why and how it would be the right solution to meet Sarawak’s oil and gas and socio-economic aspirations.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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