PM praises controversial Malaysian firm

Speaking at a PNM breakfast meeting at Crowne Plaza, Port-of-Spain on Monday, Manning used Petronas, also known as the Petroliam Nasional Berhad, as an example of the use of a SPEC for the attainment of rapid development goals.

Petronas was incorporated on August 17, 1974 under the Malaysian Companies Act 1965. It is a wholly-owned state enterprise vested with the ownership and control of the petroleum resources of Malaysia through the Petroleum Development Act 1974. As of January 1, 2007, Petronas reported that oil and gas reserves in Malaysia amounted to 20 billion barrels equivalent.

While Petronas is ranked among the FORTUNE Global 500’s largest corporations, it has this year been hit by a report by Transparency International for its low levels of revenue transparency.

The 2008 Report on Revenue Transparency of Oil and Gas Companies published this year gives Petronas a low rating in terms of its revenue transparency, operations and payments, and anti- corruption programmes internationally.

The company’s performance in Malaysia is ranked slightly better with low ratings in terms of its anti-corruption programmes, but middle ratings in terms of payment and operations.

The company does, however, rank highly in terms of regulatory and procurement issues.

Petronas, which has recently been ordered by the Malaysian government to build 200 gas stations, was thrown out of Chad in August 2006, when Mahamat Bechir Okormi, the Chad minister for state control and ethics, claimed the company had failed to pay government tax. Chad was in 2005 named one of the most corrupt countries on the planet. The expulsion followed a move by the Chad government to create a new national oil company.

Petronas has been identified as a “problem company” by genocide watchdog Investors Against Genocide for its involvement in the Sudan oil industry.

On January 21 this year, Lim Guan Eng, the chief minister of the state of Penang in Malaysia, estimated that 76 percent of Petronas’ RM500billion (around TT$1 trillion) in profits since its inception has been “stolen by corrupt officials” and “lost to corruption, waste, inefficiencies and leakages.”

The energy company has also raised eyebrows because of a series of contracts to Scomi Group Bhd, whose leading shareholder is the Malaysian prime minister’s son, Kamaluddin Badawi.

Mahathir Mohamad, a former prime minister of Malaysia, has charged publically that Scomi has received RM1billion (TT$2 billion) worth of government contracts via Petronas. Recently, Scomi secured a contract from Petronas worth RM157 million (TT$341 million) for a project in Turkmenistan.

But Petronas bought debt laden shipping company Malaysia International Shipping Corporation Bhd in 1998, which was then controlled by Mirzan Mahathir, a son of the former prime minister. The company also became the anchor tenant of the world-famous Petronas Towers, which were short of tenants when they were completed the same year.

Petronas is exempt from public disclosures of its financial statements. This has led to problems, such as a jet scandal in the 1980s over the purchase of a Boeing 747 jet which gave rise to allegations of government cronyism.