Petronas bankrupt by 2018, says Hassan Marican

Petronas president and chief executive officer Tan Sri Hassan Marican said Petronas will go bust within 10 years if all its profits are handed to the Government to continue subsidising fuel.

He warned that many national petroleum companies in the world have ceased to exist or were in financial trouble today because all their profits were taken away from them.

Hassan said that in the oil business it was important to reinvest profits in search of new technologies, reserves and continued revenue. Petronas has so far reinvested RM178.9bil of its profits.

“Petronas has played a major role by giving back a substantial amount of its profits to the Government,” he added.

At the close of its financial year in March last year, the national petroleum company had given the Government RM52.3bil in taxes, royalties and dividends which worked out to be 32% of the Federal Government’s revenue.

“Since the formation of Petronas in 1974 to last year, the company gave the Government RM335.7bil out of a total profit of RM570bil,” Hassan said.

Commenting on the fuel price increase, the Petronas boss said the corporation did not make a sen from the increase.

“All the oil companies get full market price for the petrol and diesel that they sell and the Government pay them the difference from the fixed price. This is where the subsidy comes into play,” he added.

Hassan said Exxon Mobil made about US$40bil (RM130.31bil) last year, an increase of only US$1bil (RM3.26bil) from 2006, in an environment of higher crude oil prices.

“That is the world’s biggest, most efficient and most well-run oil company. Margins have eroded,” he said.

Hassan said Petronas was now “ scraping the bottom of the barrel” as far as finding and extracting oil was concerned.

Asked about criticisms that Petronas' accounts and profits were not transparent, Hassan said the corporation published a very detailed annual report which was deposited in the Parliament library.

“For all intents and purposes, Petronas is a public-listed company because we are rated by agencies like Standard and Poors, and Moody. We do not hide anything,” he added.

Source: Petronas could go bust by 2018

Will Petronas go bust by 2018? You bet! By then equality will prevail; everyone will be poor and destitute.

Meanwhile, the effects of the increase in fuel price and electricity tariffs have started to kick in.

Just a day after the announcement of the increases, the following developments have taken place:

> Bus and lorry companies announced that they are increasing charges or will be forced to stop services;

> The Federation of Malaysian Manufacturers said its members will pass on any increase in costs to consumers;

> Hawkers and other food operators will wait and see before raising prices; and

Lorry transportation charges have increased between 40% and 60% effective yesterday. Johor Lorry Operators Association president Leow Hock Tiap said the new rates complied with the Road Transport Act 1987 allowing lorry operators to charge a maximum of 15 sen for every kilometre.

Stage and express buses may stop running in the last week of every month if operators do not receive more subsidised diesel supply under the fleet card system. Pan Malaysian Bus Operators Association president Datuk Ashfar Ali said although the system entitled them to diesel at RM1.43 a litre, supply was not enough.

“The amount we get is enough for about 70% of our operations. Unless we get at least 30% more, we are in trouble,” he told The Star.

Ashfar said operators used to absorb the price difference when the pump price was RM1.58 a litre but could not manage now that the price was increased to RM2.58 yesterday.

“My members are saying that when they run out of the diesel quota, they will stop operating until they receive the quota for the following month,” he said.


Save Energy Ma's Way

In Taiwan, President Ma Ying-jeou uses stairs instead of the life and addresses conferences in short sleeve shirts.

Chauffeur-driven ministers ride compact sedans to work, while rank-and-file officials pedal bicycles.

Taiwan's Ministry of Defence vowed to cut down on warplanes and training cruises and promised to cut oil consumption.

This is Ma's sweeping energy and cost saving drive to deal with soaring fuel, food and inflationary pressures.

(Source: NST, page 30, World, Friday June 6, 2008)

Mulling space capsule buy

Meanwhile, Malaysia is working hard to find the monies to purchase the Soyuz capsule which would likely cost $65mil for the shell and probably another $60mil for refurbishments so that it can be placed in a location that will attract tourists.

With the savings from the reducing of subsidies it should no more be a problem to allocate the funds for the capsule and also to pay for the next mission for our next space participants for a trip to ISS. The mission to the Mars is still under design stage at the ministry.

As to the rising cost of living, the govt advice the people to cut their cost of living. The programme "Ubah Gaya Hidup" will be launched soon by the various ministries and probably the govt had to allocate a few hundred millions to fund the programme.

The ministers are very excited of the programme and many of them have started lobbying for a stake in the initiatives.

At the same time, Home Minister Syed Hamid Albar said the government is concern and wish to advise all the people not to participate in any kind of demonstrations which would affect the peace of the people and cause disturbances to the silent majority of the public at large. Such acts would also adversely affect the economy and cause traffic problems. Yesterday's demonstration by DAP had caused the KLCI to drop 30 points which translates to a loss of some $3b market value.

DAMAI, the group that had called themselves the "Silent Majority" may be asked to show their patriotism again.

Lee Chong Meng is now busy preparing for DAMAI's next assignment.