Terengganu open to buying Petronas stake

KUALA LUMPUR: Terengganu said today it was open to buying a stake in national energy giant Petronas, after Prime Minister Dr Mahathir Mohamad said he was considering such a sale to raise funds for his heavily-indebted federal government.

Petronas, the world’s third-largest exporter of liquefied natural gas, is one of the biggest sources of revenue for the federal government that has a debt pile of more than RM1 trillion.

Mahathir told Reuters yesterday that the government could sell Petronas shares privately to states such as Sarawak, Sabah, Terengganu and Kelantan where the company has most of its energy assets.

Petroliam Nasional Bhd is fully owned by the federal government and has many units.

“If it’s in the form of equity, say 5% or 10%, then we can probably consider (buying) a reasonable amount of equity,” Terengganu Menteri Besar Ahmad Samsuri Mokhtar told reporters in the state capital.

There is, however, no formal proposal on the table yet, said Samsuri.

JC Fong, legal adviser to the Sarawak government, told Reuters he would not comment on Mahathir’s statement on Petronas until he saw a proposal and had the chance to evaluate it.

Sarawak accounts for two-thirds of Malaysia’s total gas production and almost a third of its oil, Fong said.

Sarawak and Sabah have the country’s most prolific oil and gas reserves.

Both states have long called for a quadrupling of royalties paid by Petronas to 20% of its profit — a demand that Mahathir has rejected, instead looking for other ways to satisfy the states’ demands.