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27 June 2016

Honda's Takata Airbag-Related Recalls

Takata Airbags ... Defective?

Takata, an airbag manufacturer, has been linked to defective airbags that inflate with too much force. Metal parts or shrapnel to lodge into the driver's chest and other vital parts, leading to death.

A number Honda cars are fitted with Takata airbags. 

The Takata airbag's defects while inflating has caused shrapnel and bits of metal to shoot out at the driver. Honda Malaysia has launched a massive recall recently (again) as the number of Malaysian casualties increase. Source of image

Malaysian Casualties

Here is a list of some Malaysian casualties compiled from a casual search on the Internet, using Google.
  1. 27th July, 2014: Woman and her fetus died. Location: Sibu, Malaysia. Car model: 2003 Honda City. Cause: Victim's car crashed into another car, and victim's "SRS air-bag was deployed abnormally and the inflator case was broken." (Bloomberg, 2014.) Victim's name was Law Suk Leh. (BusinessInsider, 2016)
  2. 16th April, 2016: Victim unknown. Location: Sabah, Malaysia. Car model: 2006 Honda City. Cause: "Takata single stage (SDI) driver’s airbag inflator ruptured in the crash" (Paultan, 2016 and New Sabah Times, 2016)
  3. 1st May, 2016: Victim unknown. Location: Kedah, Malaysia. Car model: 2003 Honda City. Cause: "Takata single stage (SDI) driver’s airbag inflator ruptured in the crash" (Paultan, 2016 and New Sabah Times, 2016)
  4. 26th June, 2016: Victim unknown. Woman (mother of two). Location: Outside Kuala Lumpur. Car model: 2005 Honda City. Cause: "the Takata single stage driver's airbag inflator ruptured in a crash." (Straits Times, 2016.)
Total deaths worldwide linked to Takata airbags: 13, as of 4th May 2016. (Yahoo News, 2016) 14 if you include the latest (26th June 2016) incident.

Total deaths in Malaysia linked to Takata airbags: 5, as of today. That's almost a third of the deaths worldwide.

Recalls by Honda Malaysia

Honda Malaysia has made a number of vehicle recalls to replace the faulty airbag inflators.
  1. 13th November 2014: 15,734 cars. (Paultan, 2014 and The Star, 2014)
  2. 10th July 2015: 143,970 cars. (The Star, 2015)
  3. June 2015: 46,710 cars. (The Star, 2015)
  4. 24th May 2016: 58,140 cars. (Paultan, 2016)
  5. 23rd June 2016: 147,894 cars. (WeMotor blog, 2016.)
Total vehicle recalls worldwide (presumably including other car manufacturers) linked to Takata airbags: 118.5 million, as of 9th May 2016. (Bloomberg, 2016)



Moving Forward

Do you own a Honda? How can you know whether you are affected? By right, you should be receiving a letter from Honda if you are affected, to let you know that you need to visit them. I'm not sure if the letter would mention Takata airbags, so you might just put it aside.

But, in case you don't get your letter, and you are panicking:

Key your VIN or Chassis Number into the Honda Website

The VIN (vehicle information number) or the chassis number can be found on the JPJ registration card or in the Honda Service Booklet. It can also be found on the vehicle body: On the passenger's side centre pillar or the engine bay firewall.

Honda's Product Update website can be found HERE. (Source: Countersteer, 2016.)

Check Your Car Model


For airbag-related recalls, the affected models are:
  • Accord (2003 - 2007)
  • City (2003 - 2012)
  • Civic (2001 - 2011)
  • Civic Hybrid (2003 & 2007 - 2012)
  • CR-V (2002 - 2011 & 2013)
  • Insight (2011 - 2012)
  • Jazz (2003 - 2007 & 2009 - 2012)
  • Stream (2003 - 2005 & 2007 - 2012)

You may also want to check the Product Update website even if your car is not affected. Honda is also recalling vehicles for the following defects:
  1. Continuously Variable Transmission (CVT); and
  2. 12V battery.

Call the Honda Malaysia Toll Free Number

Honda Malaysia’s Toll Free number is 1-800-88-2020.

You cannot order pizzas on this number.


Visit A Honda Dealer

If everything else fails, just visit a Honda dealer. They'll want to sell you a new car, and you can decide whether you will after you see how they treat you. (Especially if you walk in without any letter -- would they layan you or tell you to bring the letter?)


These crash test dummies are super excited to be the first line of defence against defective Takata airbags. They even get a chance to sit in the latest Honda models. Image source: Autoblog


But If It's Too Late...

If your loved one was killed by a Takata airbag, and you are considering legal action against Takata / Honda, get in touch. (I can represent people in court.)

01 May 2016

Malaysian Petroleum Resources Corporation (MPRC)

The SCMP Report from 2012

In September 2012, the South China Morning Post reported on Malaysia's oil and gas industry. The report highlighted Malaysia's Economic Transformation Programme (ETP), under the leadership of Prime Minister Najib Tun Razak. It called the ETP the embodiment of "Malaysia's aspirations for an integrated oil and gas industry in Asia", a long-term plan requiring investments of USD100 billion from the private sector.

The Prime Minister, Najib Tun Razak, was quoted saying, "The government will develop Malaysia into a leading oil and gas services hub in Asia, grow Malaysia's role in oil storage, logistics and trading and import LNG [liquefied natural gas] to serve latent gas demand and attract new gas-based industries."

Further from the SCMP Report:
Large crude oil and fuel cargoes from the Middle East have to be split into smaller cargo deliveries within the region. At the same time, regional producers need a terminal to aggregate supplies before dispatching to regional refiners. Blending must be done before refinery output becomes useful to other industries. With its central location in Southeast Asia, Malaysia is the best place to do all these.

Enter the MPRC (2012)

The Malaysian Petroleum Resources Corporation (MPRC) is an agency responsible for oil and gas downstream sector goals in the prime minister's department. Its CEO and president was then (in 2012) Dr Mohammed Emir Mavani Abdullah, who was also oil, gas and energy (OGE) and financial services director at PEMANDU.

The SCMP article quoted Dr Emir as saying that Malaysia is "determined to become the trading hub" for the region. So, in 2011, the MPRC launched the GIFT (Global Incentives For Trading) programme in an effort to bring in the foreign (international) trading companies.

GIFT licensees have committed to generate a minimum company turnover of US$100 million annually, spend at least 3 million ringgit (HK$7.3 million) per year and use local expertise and support services. In return, they enjoy 3 per cent corporate tax rate, 100 per cent exemption on fees paid to non-Malaysian directors and 50 per cent exemption on gross employment income for non-Malaysian professional traders.

International traders would benefit from the comprehensive Malaysian trading ecosystem, which has "financial services, logistics and insurance mechanisms".

The SCMP article also said reported that "Malaysia's target is to build 10 million cubic metres of storage capacity by 2017."

MPRC's Mandates

The following mandates are listed on MPRC's website:
  1. Provide recommendations on policies for the O&G services and equipment sector in consultation with industry stakeholders
  2. Propose recommendations on business regulations and the tax regime for the O&G services and equipment sector
  3. Develop and share an industrial blueprint for the O&G services and equipment sector
  4. Build a database of pertinent information on O&G services and equipment companies
  5. Promote Malaysia's O&G services and equipment sector and industry players abroad
  6. Leverage on local and international financial institutions to support local companies when applying for foreign contracts
  7. Support O&G services and equipment companies to set up operations in Malaysia
  8. Interact with industrystakeholders to ensure industry requirements are met in terms of research and development, talent and financial assistance

About PEMANDU

PEMANDU is a Malaysian government agency set up in 2009 to oversee economic transformation in the nation. Its CEO is Dato Sri Idris Jala, who was once the CEO of Malaysian Airlines. Under his leadership, Malaysian Airlines shares rised from RM3 to RM6 per share. They fell after his departure.

PEMANDU's annual reports are available online. The 2015 PEMANDU Annual Report is also available for download.

MPRC Today

MPRC's Leadership

A look at the MPRC website shows that Dr Emir isn't listed in the Board of Directors. This is the current line up, as of 2016:

The current Board of Directors of the Malaysian Petroleum Resources Corporation (MPRC), as of 1st May 2016 (Source: MPRC website)


MPRC's Stakeholders

MPRC's website shows that they work closely with key stakeholders, such as:
  • PETRONAS
  • PEMANDU
  • Ministry of International Trade and Industry (MITI)
  • MIDA
  • MATRADE
  • State governments and agencies
  • Federal governments and agencies
  • Financial institutions
  • Domestic and Foreign Oil and Gas Companies
  • Regional Economic Corridors

MPRC's Businesses

All the following are extracted from MPRC's website. MPRC's businesses include:

  1. Investments and Opportunities: "MPRC facilitates supports and assists investors by working closely with public and private sector entities to create the right environment for new and on-going investments in oil and gas activities throughout Malaysia. ... MPRC complements the role of other existing government agencies and regulators such as MITI, MATRADE, MIDA, InvestKL, Labuan Financial Services Authority (Labuan FSA), Labuan International Business and Financial Centre (Labuan IBFC) and Malaysia International Islamic Financial Centre (MIFC) in trade and investment promotion." 
  2. Global Incentives for Trading (GIFT): "Global Incentives For Trading (GIFT) programme was introduced by MPRC and Labuan Financial Services Authority (LFSA) with the objective to attract global companies trading in petroleum and petroleum related products to locate their regional operations to Malaysia. Malaysia’s central geographical location and connectivity, is an ideal link between buyers and sellers in the region."
  3. Oil & Gas Services and Equipment (OGSE): "The OGE NKEA is a focused and sustainable initiative to attract more investments into Malaysia, to develop human capital, to encourage greater technology transfer and to use Malaysia as a regional base to do business in the Asia Pacific region." The OGSE initiative has three thrusts: (1) Sustaining oil and gas production; (2) Enhancing downstream growth; (3) Making Malaysia the Number One ASEAN Hub for Oil Field Services
  4. Pengerang Integrated Petroleum Complex (PIPC): "The Pengerang Integrated Petroleum Complex (PIPC) is one big step in creating value to the downstream oil and gas value chain in Johor. Sited in Pengerang, it is one of the largest pieces of investments in Pengerang district and located on a single plot measuring about 20,000 acres. The project will house oil refineries, naphtha crackers, petrochemical plants as well as a liquefied natural gas (LNG) import terminal and a regasification plant. In PIPC, oil refining facilities will add value to imported crude oil via the Pengerang Independent Deepwater Petroleum Terminal (PIDPT)."
  5. Sipitang Oil & Gas Industrial Park (SOGIP): "Sipitang Oil and Gas Industrial Park (SOGIP), located on a 4,065 acres site, will serve as a new focal point for oil and gas investment within the Sabah, Brunei and Labuan economic centres. The availability of oil and natural gas found off the shores of Sabah allow for development of industries that utilise oil and natural gas, especially the petrochemical industry which involves ammonia derivatives..., urea derivatives ..., bulk storage, refinery and fabrication. SOGIP is located in Mengalong, Sipitang ... 145 kilometres from Kota Kinabalu and its location is in close proximity to Labuan and Brunei Bay..."

From the PEMANDU 2015 Annual Report

MPRC was mentioned quite a number of times in PEMANDU's 2015 annual report. Since this is only a "snapshot", it will be sufficient to look at the 2015 annual report. Those interested in yesteryears can look at the earlier annual reports of PEMANDU.

Some highlights from 2015 (extracted from PEMANDU's 2015 Annual Report)
  1. "MPRC, along with Malaysia External Trade Development Corp (MATRADE), intensified efforts to bridge business opportunities in key ASEAN markets in the run up to the ASEAN Economic Community (AEC) which took effect at end-2015. A total of 33 Malaysian OGSE companies were led on three Specialised Marketing Missions (SMMs) to Indonesia, Myanmar and Vietnam" (page 127)
  2. "MPRC also actively assisted MATRADE on five other SMMs – to Azerbaijan and Kazakhstan, Kuwait, Brazil, Abu Dhabi, and Saudi Arabia" (page 127)
  3. "MPRC hosted its second Oil & Gas Financial Forum (OGFF) in June 2015 to improve local OGSE firms’ access to funds. The OGFF connected oil and gas services and equipment (OGSE) companies with key players in Malaysia’s financial services landscape namely Bank Negara Malaysia, RHB Bank, SME Bank and Societe Generale, among others – to explore financing for the OGSE firms as well as to raise awareness on the OGSE landscape in Malaysia" (page 127)
  4. "As part of the technology development agenda for local OGSE companies in the 11th Malaysia Plan, MPRC has entered three memorandums of understanding with Universiti Malaya,  Universiti Teknologi Malaysia and Universiti Teknologi Petronas. These collaborations pave the way to the establishment of three research and development clusters to form industry-academia partnerships that will support the growth of Malaysian technologies and talents in OGSE sector. The three clusters, also known as Oil & Gas Innovation and Technology Clusters (OGITeC) will be advancing innovations and technology development in the following areas: Subsurface Technology (UM), Marine Systems (UTM), and Topside Process Engineering" (UTP) (page 127)
  5. "MPRC actively promotes the development of O&G focused training and development centres within the country. Internationally recognised institutions such as Aberdeen Drilling School, UMW-INSTEP Drilling Academy, Harness Energy, The Welding Institute and OPITO BOSIET Training centres have been established in Malaysia." (page 128)
  6. (In 2014, MPRC introduced the MPRC100.) "The MPRC100 is a list of the Top 100 Oil and Gas Services and Equipment (OGSE) companies in Malaysia ranked based on their revenue. It maps industry segments where the MPRC100 companies are operating in, and provides industry commentary featuring an aggregated view of the OGSE industry in Malaysia, and supplemental analysis." (page 132)
  7. "Other than the MPRC100, MPRC published two other documents - Malaysia OGSE Catalogue (the 2016 edition features 154 companies) and Malaysia Oil and Gas R&D Catalogue." (page 133)

Conclusion

The MPRC seems to be quite an important agency under PEMANDU's plans. Under Dato Sri Idris Jala's leadership, I have high hopes for the MPRC. I hope that there will be positive developments for the Malaysian oil and gas industry.


Read again: SCMP's 2012 report OR Enter the MPRC OR MPRC's Mandates OR About PEMANDU OR MPRC's Leadership OR MPRC's Stakeholders OR MPRC's Businesses OR OR Highlights about MPRC from PEMANDU's 2015 Annual Report

26 April 2016

Petrol Stations Must Have Sufficient Fuel

And It's A Law!

Did you know that petrol stations must have sufficient fuel? If they run out of fuel supply, they must order more. This may not be a big thing in Kuala Lumpur, but imagine what happens in the more remote areas of the country! The scenario goes like this: Petrol prices are falling (they have been falling for a few months), and it's the last day of the month, maybe half a day to the next month. The petrol station owner is sorely tempted not to refill his station because he knows, if he orders fuel today, and fills his tanks, within 12 hours the oil in the storage tanks would be worth less than he paid for them. Because oil prices are falling, whatever he pays for oil today is more than what he would pay tomorrow (i.e. the next month).

So should the petrol station refill? In Kuala Lumpur and the Klang Valley in general (including Petaling Jaya), it might not be an issue. Just drive ten minutes and voila! There's another petrol station. But let's imagine that you're in some remote town in Sarawak (where there is an election going on right now). You go to your regular petrol station, and you see a signboard saying, "SORRY NO PETROL. COME BACK TOMORROW." You try to figure out where the next nearest petrol station is. It's about an hour away, not very far by Sarawakian terms. (Correct me if I'm wrong) Your car is nearly out of petrol and you believe that you won't make it to the next station. You might not even manage to cover half the distance to the next station. Now, would you think that that "sorry no petrol" is a good excuse? I do not think so. It is only a convenient excuse for the petrol station owner to say, "I've run out of petrol. Come back in 24 hours, when petrol is cheaper, so that I don't need to refill with more expensive petrol." And so you pull up a chair at the petrol station, and sit down to wait. It's only 12 hours to the refill....

RM1 Million or Three Months

On 1st February 2015, the Borneo Post reported as follows:
KUCHING: A petrol station in Bintulu was found to have violated its licence conditions under the Ministry of Domestic Trade, Cooperatives and Consumerism Act Section 21(1).
According to KPDNKK Sarawak deputy director and enforcement chief officer Abdul Hafidz A Rahim, the station failed to ensure that the fuel supply was sufficient and constantly available to its customers.
“We will take stern action against this petrol station in Bintulu which deliberately did not place an order for more fuel despite exhausting its fuel supply since 3pm yesterday (Saturday).
“An investigation will be carried out and if found guilty, the maximum penalty for this offense is RM1 million or three months in prison,” he said in a press statement today.
(Source: Borneo Post Online, 1st February 2015. Petrol station faces stern action)

So the maximum fine is RM1 million, or three months in prison. It sounds impressive.

But in reality, the maximum punishment is not often meted out. Being the "maximum", it is reserved for serious cases. I believe that we should ask ourselves, instead, what the minimum punishment is. What is the minimum fine? And what is the minimum prison time?

The KPDNKK were in Kuching last year looking at petrol stations. If your petrol station is half full, or half empty, you're doing all right. If your petrol station is completely empty, you're in big trouble!

Internet of Things To The Rescue?

Of late, Internet of Things, or more popularly called "IoT", has become a big thing. The promise is that machines, with intelligent sensors, coupled with 24/7 Internet access, will be able to automate many things. A common example is office printers. Many people print until the printer cartridges are empty. When the user realizes that the cartridge has been drained to the last drop, he goes to the shop to buy a new one. In the meantime, the printer cannot be used until the printer has been fitted with a new cartridge. If the user delays in going to the shop, the printer is offline and unusable for the duration of the delay. With today's fast-paced world, it's highly likely that the user will not be able to go out immediately to buy a new cartridge. ("Drop everything, let's go! No?") Even with e-commerce, it takes time for an order to be placed online, processed, packed, and delivered. Two days might be enough, but it's two days too long.

But with the Internet of Things, the story of the printer and its unhappy, unproductive user becomes transformed into a fairytale. With an IoT-enabled printer, it can sense when the printer cartridge is about to run out of ink or toner. It can sense when the drum is about to go bust. And it can connect to the Internet, make an order on behalf of its user, and send an email notification to the user as it does so. Two days later, the printer cartridge is spent, and the printer stops working. But only for 5 minutes, because a replacement cartridge is on standby.

Imagine if we had that kind of technology for petrol stations. Before the petrol station runs out of petrol, the intelligent sensor detects an impending shortage. The smart computer chip in the petrol station starts talking to the server in the petrol supplier's office. "Send me some fuel," it says, "before I am empty. Fill me again, and I will be full. I want to serve the Malaysian public." And so, an order is made electronically, and two days later, just as the petrol runs out in the petrol station, there is a delivery truck, with a tanker full of oil. A smart looking man steps out and says to the astonished petrol station owner, "We're here with your refill!"

And that's how you prevent petrol stations from running out of fuel.

18 April 2016

Shifting Dynamics of Oil Demand

In a report "Oil and Gas Reality Check 2015" by consulting firm Deloitte one of the issues discussed was the dynamics of the demand for oil. Among some of the points raised in the report on the shifting dynamics of oil demand, were:

  • The International Energy Agency forecasted that demand for oil would grow by 0.9 MMbbl/d in 2015. 
  • China's demand for oil is strong and remains a "demand center", with projected demand for oil at 18 MMbbl/d in 2040. However, its main sources for oil may change in time.
  • European demand for oil is expected to maintain at 14 MMbbl/d in 2040.
  • In the US, crude oil imports have dropped 3% year-on-year as of January 2015. Players in the oil industry are starting to focus on domestic (US) demand, which are seen as more stable.
  • Japan's oil demand has dropped 22% since 2000, with increasing reliance on natural gas and nuclear. Nuclear is seen as a viable main source of energy.
  • The Asia Pacific oil-importing countries accounted for 70% (estimate) of global oil demand from 2010 to 2020.
  • The recent drop in oil prices was a boon to many governments. Many countries took the opportunity to cut fuel subsidies: Mexico, Brazil, India, China, Indonesia, Kuwait , Oman, Egypt, Tunisia, Morocco and Malaysia

Challenge of Drying Wells

In 2014 the IEA confirmed that global demand for oil is increasing. However, the challenge to this is, as Primeast describes it:
It is no secret that oil wells are drying up, but many people underestimate just how quickly this is happening. Whilst total OECD commercial oil inventories inched down by 6.5 million barrels in February, to 2,567 million barrels, this doesn't tell the whole story.

Companies are having to work exceptionally hard to increase their stocks. New sources are being identified, but these are often much deeper than existing fields and extracting oil is far more dangerous. This means the very latest technology is required to access these wells, which obviously costs a lot of money.

Challenge of the 3 D's.

In another Primeast article on the "Top 5 Challenges Facing Oil and Gas Gompanies", it was further stated:
Businesses are finding new sources, but these are proving to be extremely hard to access. In many cases they are deep underground, difficult to drill and distant from companies' existing sites. You could call this the 3D effect, and it is essentially three challenges rolled into one.

To extract oil from these new wells, firms need cutting-edge technology and highly-skilled engineers - both of which come at a price. The demand for oil and gas is continuing to rise at a time when resources are at their most stretched and this is putting a huge amount of pressure on businesses.

What I Think

With the number of challenges facing the oil and gas sector, I wonder why it is that oil companies are not already investing in alternative energy industries. It would be great if oil companies invested in electric vehicles. With all the money they have, they could easily fund innovation in affordable electric vehicle motor engines.

National Oil Companies (NOC's) are estimated to control 90% of the world's oil reserves. (source: 2015 report by Deloitte, look above for link) That means that they are sitting on a lot of money.

It is a terrible irony when the world's governments agree that reducing their carbon emissions is a very pressing concern, but the world's national oil companies (NOC's) want to increase their production and do everything they can to push demand further. Obviously, a more consistent approach is required to deal with the challenges of climate change. This would require a more unified approach among climate change stakeholders - which include oil and gas companies.

08 April 2016

Ranhill Denies Link to Unaoil

Ranhill Holdings Bhd. is a Malaysian company. Recently it has denied being involved in the Unaoil bribery scandal. The following is a photograph of a recent newspaper report (source: The Sun Daily, 6th April 2016.)

The recent statement from Ranhill Holdings Bhd. reads as follows: "....we wish to clarify and confirm that neither Ranhill Holdings Bhd nor any of its group of companies has entered into any transaction or arrangement with Unaoil. We wish to further clarify that at Ranhill, we have due process prescribed in the forms of policies and procedures in regards to engagement of third parties that include due diligence process and we practise code of conduct and good business ethics."


For the curious readers, they may like to read the article linking Ranhill to Unaoil (article by The Age, Australia). 

My Thoughts on the Matter

Here is my advice to Ranhill: The right response would be to demand that The Age withdraw its statement from the offending article and publish an unreserved apology in a major newspaper in Malaysia, or better yet, in its own newspaper. If The Age fails to respond, sue them. 

I hope that Ranhill takes steps to prove its innocence by taking The Age to court. It would be better for Ranhill. Malaysians want to see this kind of action, the type where the victim proves his innocence by taking legal action. 

A certain prominent Malaysian politician has recently failed to sue an international newspaper, despite the amount of lies (allegedly) that the newspaper has published about the said politician. "We are innocent, we know it, let them say what they want." This kind of reasoning doesn't work anymore, and in this new age reputation management is important for maintaining the public's trust.

Update: Petronas Named

Petronas have been implicated in the Unaoil scandal as well. The original article which named Petronas is at The Age Australia, Unaoil: Dark Secrets of Asian Powers. The Age named Petrofac (UK) as the Unaoil client.

Unfortunately due to a paywall I was unable to access an article in the Edge. However thanks to a certain M.A. Wind, blogging about corporate governance in Malaysia, we know that Petronas responded as follows:
“Petronas takes the allegations very seriously,” the statement read. “The company has a zero-tolerance policy against all forms of bribery and corruption and expressly prohibits improper solicitation, bribery and other corrupt activity by employees, directors and third parties performing work or services for or on behalf of companies in the Petronas group.”
Thanks Mr. Wind.