Thursday, June 26, 2014

Edge Weekly Petronas President speaks out fearlessly amid rumours he is under pressure to leave

KUALA LUMPUR: Rumours are again rampant that Petroliam Nasional Bhd (Petronas)’s president and CEO Tan Sri Shamsul Azhar Abbas will leave his post, but this man at the helm says he will continue to defend professionalism and independence fearlessly, reported the Edge Weekly in its latest June 23-29 issue.

In an exclusive interview with the Edge Weekly, Shamsul said he had to continue to fight for Petronas’ independence and guard the interest of the national oil company in the face of political pressure.

He will continue to adopt the open bidding method when dishing out oil and gas jobs to bring down cost for Petronas. He will not bow to political pressure to give jobs to unproven businessmen. He will not be held ransom by greedy well-connected contractors.

“It’s so difficult to do an honest day’s job. You spend a lot of time away from your true function (of running Petronas),” Shamsul lamented during the interview conducted last week.

“It’s not just people outside [who are making things difficult but] also people in the government — the bureaucrats. Bureaucratic interference makes things difficult,” he added.

In fact, things have been tough for Shamsul since he took the reins of Petronas from Tan Sri Hassan Marican in 2010, said the weekly financial paper of The Edge in its cover story on page 80-82. 

Among the changes Shamul has made that has irked the government is to cap the dividend paid to the federal government at 30% of Petronas’ net profit from 2013 onwards. This has also angered many in UMNO, who feel that Petronas should cough up more.

But Shamsul argued: “We need money to grow. If we remain static and all our production is depleting…in 13 years’ time we might as well close shop”.

Most of Shamsul’s woes stem from well-connected business owners who have lost out on lucrative jobs after open bidding became the preferred mode, compared with fixed allocation for local firms done previously.

Companies under Petronas’ vendor development programme are no pushovers either as they are usually politically linked. They are unhappy that Shamsul had clamped down on their request to be allocated jobs. Some were loading up their costs by as much as 48%, making exceptionally big margins.

“I’m a Malay too, I’m proud to be one … you think I don’t want to help my own people? Of course I want to help them, but in the proper way -- not through handouts and spoon-feeding,” Shamsul told the Edge Weekly.

In fact, the frustrations of Shamsul could be felt from the following quotes extracted from the Edge Weekly:

“Everybody can see that we at Petronas are under immense pressure … We take pride in telling the whole world, telling the whole of Malaysia, that we are a Fortune 500 company, but do we behave like one?”

“This is what the fighting is all about, trying to give ourselves some independence, so that at the end of the day, we are measured in terms of our performance, delivery and results, and not having anyone intervening and telling us what we have to do and that we have to give handouts to all.”

“The government wants us to be like an international oil company, comparable with the Shells and ExxonMobils of the world, so we try to be one. But Shell and ExxonMobil are not harassed by their governments.”

“In the Petroleum Development Act, it is very clear — oil and gas belong to all Malaysians. It doesn’t say oil and gas belong to the bumiputeras, it doesn’t say that … it says all Malaysians, so they can be in the government, they can be in the opposition, they can be wherever … and we are the custodians.”

“It is amanah … diamanahkan … the word amanahkan is very strong — as a Muslim, it would be a huge sin if I abused ‘amanah’.

“We are dealing with politicians; they say one thing but do another, so it’s difficult… it is frustrating.”

For more details on the interview and more insightful information on Petronas’ latest major project RAPID, readers can turn to page 80-82 of the Edge Weekly.

This major interview with Shamsul was conducted by Kathy Fong, Jose Barrock and Fatin Rasyiqah Mustaza of The Edge.

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