Dear all,
After reading all the chain mails and blogs, I feel called to reply, because
of the relentless attacks and allegations -- most of which are inaccurate or
baseless -- against PETRONAS.
*PETRONAS' STAFF SALARY & BONUS*
1) The salaries paid to PETRONAS' employees are not as high as people think.
At best, they are just industry average. And these are not attractive enough
for some who left PETRONAS to find work at other companies (mainly from the
and gas industry worldwide has been facing acute shortage of qualified or
experienced personnel, so most companies are willing to pay lots of money to
entice and pinch staff from their competitors.
Bonus? There has NEVER been a bonus amounting to 6 months or 12 months
throughout the 33 years. On average, it is 2 months. But don't ever think we
don't deserve it. We more than deserve it. A lot of us work really hard,
some in the most extreme of conditions. Those who have been to and worked in
northern
blower oven.
mud. Imagine having to go through that kind of heat, or waddling in muddy
swamps, day in and day out.
*QUALITY OF CRUDE & REFINED PRODUCTS*
2)
100,000 barrels condensate). Of this crude volume, 339,000 barrels are
refined locally for local consumption. The rest is exported (and yes,
because it has lower sulphur content it fetches higher prices).
from the
sulphur and is less expensive (so the country gains more by exporting our
crudes). In
refinery in Melaka, and also by Shell at its Port Dickson refinery.
Different refineries are built and configurated to refine different types of
crude. And each crude type yields different percentage of products (diesel,
gasoline, kerosene, cooking gas etc) per barrel.
But most importantly, products that come out at the end of the refining
process have the same good quality regardless of the crude types. That's why
PETRONAS, Shell and Exxon Mobil share the same pipeline to transport the
finished products from their refineries to a distribution centre in the
accordingly to be distributed to their respective distribution networks.
What makes PETRONAS' petrol different from Shell's, for example, is the
additive that each company adds.
*PETRONAS' ROLE, FUNCTION & CONTRIBUTION*
3) A lot of people also do not understand the role and function of PETRONAS,
which is essentially a company, a business entity, which operates on a
commercial manner, to mainly generate income and value for its shareholder.
In this case, PETRONAS' shareholder is the Government.
In 1974, when PETRONAS was set up, the Government gave PETRONAS RM10 million
(peanuts, right?) as seed capital. From 1974 to 2007, PETRONAS made RM570
billion in accumulated profits, and returned to the Government a total of
RM335.7 billion. That is about 65% of the profits. That means for every RM1
that PETRONAS makes, 65 sen goes back to the Government.
Last year, PETRONAS made a pre-tax profit of RM86.8 billion. The amount
given back to the Government (in royalty, dividends, corporate income tax,
petroleum products income tax and export duty) was RM52.3 billion. The rest
of the profit was used to pay off minority interests and taxes in foreign
countries (about RM7.8 billion - PETRONAS now operates in more than 30
countries), and the remaining RM26.7 billion was reinvested. The amount
reinvested seems a lot, but the oil and gas industry is technology- and
capital-intensive. Costs have gone up exponentially in the last couple of
years. Previously, to drill a well, it cost about US$3 million; now it costs
US$7 million. The use of rigs was US$200,000 a day a couple of years ago;
now it costs US$600,000 a day.
A lot of people also do not realise that the amount returned by PETRONAS to
the Government makes up 35% of the Government's total annual income, to be
used by the Government for expenditures, development, operations, and yes,
for the various subsidies. That means for every RM1 the Government makes, 35
sen is contributed by PETRONAS.
So, instead of asking what happens to PETRIONAS' money or profits, people
should be questioning how the money paid by PETRONAS to the Government is
allocated.
*CRUDE EXPORTS & FUEL PRICES*
4) A lot of people also ask, why
we just stop exporting and sell at cheaper prices to local refiners? If
cheaper prices like other oil producing countries in the
I guess I don't have to answer the first couple of questions. It's simple
economics, and crude oil is a global commodity.
Why can't we sell petrol and diesel at lower prices like in the
Well, comparing
comparing kurma to durian, because these Middle Eastern countries have much,
much, much bigger oil and gas reserves.
cubic feet of gas. Compare that to
and 240 trillion cubic feet of gas.
9 million barrels per day. At this rate,
revenue could amount to US$1.2 billion per day! At this rate, it can
practically afford almost everything -- free education, healthcare, etc, and
subsidies -- for its people.
But if we look at these countries closely, they have in the past few years
started to come up with policies and strategies designed to prolong their
reserves and diversify their income bases. In this sense,
PETRONAS) has had a good head start, as we have been doing this a long time.
Fuel prices in
under the Automatic Pricing Mechanism introduced more than a couple of
decades ago. It is under this mechanism that the complex calculation of
prices is made, based on the actual cost of petrol or diesel, the operating
costs, margin for dealers, margin for retail oil companies (including
PETRONAS Dagangan Bhd) and the balancing number of duty or subsidy. No
retail oil companies or dealers actually make money from the hike of the
fuel prices. Oil companies pay for the products at market prices, but have
to sell low, so the Government reimburses the difference -- thus subsidy.
Subsidy as a concept is OK as long as it benefits the really deserving
segment of the population. But there has to be a limit to how much and how
long the Government should bear and sustain subsidy. An environment where
prices are kept artificially low indefinitely will not do anyone any good.
That's why countries like
subsidies. Even
selling fuel at market prices.
*PETRONAS & TRANSPARENCY*
5) I feel I also need to say something on the allegation that PETRONAS is
not transparent in terms of its accounts, business transactions etc.
PETRONAS is first and foremost a company, operating under the rules and
regulations of the authorities including the Registrar of Companies, and the
Securities Commission and
(PETRONAS Dagangan Bhd, PETRONAS Gas Bhd, MISC Bhd and KLCC Property
Holdings Bhd.
PETRONAS the holding company produces annual reports which are made to
whomever wants them, and are distributed to many parties and places;
including to the library at the Parliament House for perusal and reading
pleasure of all Yang Berhormat MPs (if they care to read). PETRONAS also
makes the annual report available on its website, for those who bother to
look. The accounts are duly audited.
The website also contains a lot of useful information, if people really care
to find out. Although PETRONAS is not listed on
intents and purposes, it could be considered a listed entity as its bonds
and financial papers are traded overseas. This requires scrutiny from
investors, and from rating agencies such as Standard & Poor and Moody's.
*BOYCOTT PETRONAS?*
6) The last time I checked, this is still a democratic country, where people
are free to spend their money wherever they like.
For those who like to see more of the money that they spend go back to the
local economy and benefiting their fellow Malaysians, perhaps they should
consider sticking to local products or companies.
For those who like to see that the money they spend go back to foreign
shareholders of the foreign companies overseas, they should continue buying
foreign products.
*FINAL WORD (FOR TODAY)*
I'm sorry this is rather long, but I just have to convey it. I hope this
would help some of you out there understand something. The oil and gas
industry, apart from being very capital intensive, is also very complex and
volatile. I'm learning new things almost every single day.
Appreciate if you could help to forward this response to as many contacts as
possible to counter the subversive proposal out there.
Thank you.
Regards,
SITI NORHANA MOHD NOOR
EXECUTIVE (C&S)
PROPERTY & FACILITIES MANAGEMENT DEPARTMENT
3rd FLOOR,
PETRONAS OFFICE COMPLEX,
24300 KERTEH, KEMAMAN,
TERENGGANU DARUL IMAN.
EMAIL: norhana_noor@
D/L: 09-865 5642
FAX: 09-864 0287
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