It has been over one and a half years since the announcement to set up Petroleum Sarawak Bhd (Petros) was made. Until today, no specifics have been released by the Sarawak government or its Chief Minister Abang Johari Openg.
As days go by, more questions emerge such as the amount of initial paid-up and working capital the state government will inject to get Petros operational, and who will make up the senior management aside from Saau Kakok who has been announced as its CEO.
Saau is a former special projects vice-president of US-based independent oil company, Hess Corporation.
Abang Johari, when announcing the setting up of Petros in 2017, said: “Petros is expected to be in operation within six months because we must get our side ready for us to get involved in upstream oil and gas (O&G) activities.”
He was also quoted as saying that Petros need the expertise, thus the state government’s approach must be correct. “The one I’m talking about is our own state-owned company, which will work together with Petronas,” he said.
Saau’s appointment was announced after that. He was headhunted for the job in March 2018, despite strong interest from numerous applicants for the post.
The chief minister said Saau, a Bidayuh, had spent almost 40 years of his career in the O&G industry and his experience, professionalism and network within the O&G fraternity made him the ideal choice to lead the Petros operations team.
It is thus perplexing that Petros has chosen to maintain silence on calls by Lina Soo and S4S to be transparent in its negotiations with Petronas or any other party to “reclaim” the state’s right to regulate and develop its O&G resources from Petronas.
Neither Saau nor his team has weighed in with an experienced and professional opinion on increased oil royalties for the state, or even attempted to offer a commercially viable method of calculating it for the benefit of Sarawak and the nation’s O&G industry.
Petronas’ track record since it was incorporated may have given ordinary people and even state politicians the mistaken perception that the O&G business is easy and provides very good returns.
Nothing could be further from the truth.
If the GPS government and its politicians think this is so, they need to be educated by Petros and its very experienced board members, including Hamid Bugo the chairman, who is also a director with Sapura Energy; Medan Abdullah who is ex-Petronas; and Sharbini Suhaili who is Sarawak Energy CEO and also ex-Petronas.
The business is cyclical, highly capital-intensive and high-risk. Sarawak should already have an inkling of that from the participation of the state-owned Sarawak Economic Development Corporation in a venture called Blackgold in the 1980s under the administration of the Taib government.
The venture never took off but the corporation and ultimately the state lost tens of millions of ringgit of the Sarawak people’s money, perhaps even more.
The burning question for Sarawak now is whether setting up Petros is any less of a business risk or perhaps an even bigger one.
If the state wants to start from scratch, how steep a learning curve will it be for it and the executives hired by Petros before any real profits come to Sarawak’s coffers and the people?
Or will it be another Hollywood production where cronies and opportunistic foreign companies with vested interests embark on an oil field grab and virtually nothing goes back to the people of Sarawak?
Petros has been entrusted with a heavy responsibility by the current state government.
The previous Adenan Satem administration was against such a move. It is now incumbent on Petros and its experienced and professional management team and board to lay out its plans on why and how it would be the right solution to meet Sarawak’s O&G and socio-economic aspirations.
Santhia Panjanadan is an FMT reader.
The views expressed are those of the author and do not necessarily reflect those of FMT.