YOURSAY | ‘Arul can still answer these questions in yet another programme on Bernama .’
Odin Tajué: Petaling Jaya Utara MP Tony Pua, I refer to your question number 2.
If PetroSaudi International (PSI) had indeed entered into a farming agreement with the Omani-Canadian oil company Buried Hill (BH), I do not think that it could have invested its, as you have put it, rights to oil reserves in the Serdar Field, offshore Turkmenistan.
PSI would have been the ‘farmee', and Buried Hill the ‘farmor'. As the latter was the farmor, and hence the concessionaire, it would, one presumes, hold the rights to the concession and thus to the said field.
It is said that in the farming agreement between PSI and BH, the former would fund the entire hydrocarbon (oil and/or gas) exploration activities at the Serdar Field and in return take 50 percent of the hydrocarbon produced.
So, in actuality, and provided that PSI had indeed entered into such an agreement, it (PSI) only had on offer as an asset 50 percent of the production. But let's bear in mind that the 50 percent of the recoverable reserves cannot be extracted in a day or even in a week but in years - perhaps at the very least, around 20 years or even 30 years.
Outpoint: A reservoir may contain X amount of hydrocarbon, but the oilman cannot extract all of it. There will be some that cannot be recovered, even when tertiary recovery is effected.
PSI is said to have commissioned one Edward Morse of New York, who was a former banker, to evaluate the Serdar Field. Morse came up with a value of US$3.518 billion. This suggests that he had worked out the worth of the reserves. This sounds odd.
According to the Washington-based Center for Strategic and International Studies and others, the field was discovered in 1959. The first exploratory well was drilled in 1986 and production commenced two years later.
Obviously, then, appraisal drilling and development drilling have been done previously; otherwise, how could production have been effected? And it also means that the size of the reserves was already known.
Why was Morse, an ex-banker, commissioned to calculate the worth of the reserves? Although PSI might be only an oil support and services company and not an oil company as we understand this term to mean, it should have had no difficulty in doing the calculation itself.
What, then, did Morse evaluate? He could not have been commissioned to seek information on the size of the reserves and calculate its worth, because if PSI had indeed entered into a farming agreement with BH, it should have already obtained all the necessary field or reservoir data from the latter before it negotiated the terms of the agreement.
Here is another odd thing. It is said that Morse was actually commissioned by PSI on Sept 27, 2009 to do the evaluation. The Joint Venture Agreement that formalised the partnership of 1MDB and PSI was signed on Sept 28, 2009. Morse submitted his report only the next day.
Question: How could 1MDB have signed the agreement without knowing how much PSI would have injected as its subscription?
The fact that Morse took only a day or two to come up with his valuation further supports the idea given above that he has calculated the worth of the reserves.
So, let's say the reserves have been calculated by geophysicists and reservoir engineers to contain 50 million barrels of oil, all you need to do is to multiply 50 million by the price per barrel of oil applicable for that region.
Why could PSI itself not do that? Or, what, then, was Morse asked to evaluate?
And here is something that further makes the whole thing sound dubious - the appointment of Morse is said to have been backdated to Sept 20, 2009.
Anonymous 29051438068738: Odin, I think the quality of your well-researched comment (together with Pua's questions) has caused a minor tremor in the 1MDB lair, which subsequently induced the House speaker Pandikar Amin Mulia to issue another "I will resign" threat.
FellowMalaysian: Pua's research and investigations on 1MDB must be extensive and thorough in order to produce these 10 questions for 1MDB boss Arul Kanda to answer.
Though much of these questionable financial records, transactions and transfer of funds have been raised and highlighted by Pua and his fellow colleagues before in the course of their findings into the 1MDB debacle, their queries were then very specific and usually they just touched on a particular transaction or a specific subsidiary of 1MDB which got into problem.
Though the list mentioned by Pua is by no means exhaustive, it will nevertheless form a framework for the live show and guide the audience on the line of questioning.
Issuing the list of questions should also be well-received by Arul as he organises and gleans his files and record.
We look forward to a world-class professionally-answered 'nothing-to-hide' talkshow, which hopefully will alleviate much of the mysteries and doubts surrounding 1MDB.
Mushiro: Pua is a gentleman to release the 10 questions and none of the questions are personal in nature. All the questions focus on the financial issues of 1MDB, which Pua and most Malaysians are worried sick about.
Credit should also go to Arul for agreeing to participate in this live forum.
Victor Johan: If this Q&A cum talk show doesn't take place for obvious reasons, Arul can specifically answer these questions in yet another programme on Bernama , or a session in a hotel function room.
All the same, the Malaysians out there who have been frustrated, perplexed and perhaps confused will get those answers.
Vijay47: The most assuring aspect of these 10 questions, actually a few million more than 10 with all the subsidiary questions, is that all of them are based on public documents and even statements made by 1MDB or Arul himself.
Anybody with a good understanding of accounting and financial transactions could have come out with these same questions, though it is highly unlikely that most of us have the expertise to do so.
Thus Pua can never be ambushed by allegations that he used his membership in Public Accounts Committee (PAC) to unfairly and illegally attack Arul.
Apart from the mere mechanics of arranging the encounter, the 1MDB team will no doubt be focusing on the questions listed and preparing their authoritative replies.
In like manner, I am equally sure that Pua's team will also be getting ready their follow-up questions and a few more hidden up their sleeves. Let the game begin.
But the 11th question is - will PM Najib Razak allow the bout to go on?
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