08 February 2010

Petronas has new CEO

Petronas, often known as the biggest contributor to the Malaysian economy, has a new CEO. The Star published an interview and a profile with the new CEO of Petronas, Datuk Shamsul Azhar Abbas. (Ref: The Star, 8th February 2010. Shamsul an adequately qualified successor at Petronas) Amongst others, the interview mentioned:

  • Datuk Shamsul joined Petronas in 1974 and worked his way upwards;
  • Datuk Shamsul's last held position was chairman and CEO of MISC Bhd between 2004 to 2009; and
  • Datuk Shamsul has his challenges cut out for him as Petronas needs to handle Petronas' commitments to develop the Iraqi oil industry, and generate a targeted RM30 billion per annum.

The appointment of Datuk Shamsul as CEO may have something to do with Dr Mahathir's opinion that the new CEO of Petronas must be "from within". Dr Mahathir, ex-Premier of Malaysia and advisor to Petronas, is influential despite having retired from politics. (Ref: The Star, 28th January 2010. Dr M: New Petronas CEO must be from within.)

Tengku Razaleigh, a crown prince of the state of Kelantan and a senior UMNO politician, has called upon the new CEO of Petronas to conduct business ethically, to abide by the law, and not heed the calls of politicians. (Ref: The Star, 6th February 2010. Abide by the law, Tengku Razaleigh tells oil corporation.) Tengku Razaleigh, also Member of Parliament for Gua Musang, also reiterated his stand that the state of Kelantan is entitled to 5% royalty of the petroleum extracted in its waters. Tengku Razaleigh, popularly known as Ku Li, is the founding chairman of Petronas. (Source: The Malaysian Insider, 8th February. Umno can sack me, says Ku Li.)

In July 2008, Jabatan Penerangan Malaysia (Information Department of Malaysia) published a paper, "Sumbangan PETRONAS Kepada Negara", which explains that, amongst others:
  • PETRONAS contributes RM100 million per annum to the Wang Amanah Negara since 1987 to provide for the rakyat once our petrol reserves are exhausted;
  • PETRONAS founded Universiti Teknologi PETRONAS and Institut Teknologi Petroleum;
  • PETRONAS founded Petrosains to spark interest amongst members of the public in science and technology;
  • PETRONAS is involved in developing an engine for Formula One races;
  • PETRONAS' involvement in shipping and exporting LNG has generated much more income than our exports.

Datuk Shamsul replaces Tan Sri Hassan Merican, who has been at the helm of Petronas since 1995. The Business Times of Singapore was full of praise of Hassan Merican, and had these kind words to say:

As for Mr Hassan, there is talk that he could be an adviser to the government on the gas business.

Petronas is a strange beast. Under the Petroleum Development Act, the governing statute of the oil firm, its chief executive and chairman - and Mr Hassan is both - are answerable only to the Prime Minister, who has complete authority over the oil company's affairs. In short, Mr Najib is free to pick whoever he chooses.

The cool relationship between Mr Najib and Mr Hassan has been well documented by BT and needs no further airing. We wish Mr Shamsul luck but we would also want to spare a thought for Mr Hassan on the eve of his departure.

Simply put, he has done his country proud. Under the leadership of Azizan Zainul Abidin, who was chairman when Mr Hassan was chief executive, Petronas transformed itself into a respected global energy player much 'copied' by other national oil corporations.

It contributes 45 per cent of government revenue and is critical to the economy of the country. Indeed, it has become so crucial to the country that it is scary of think of a Malaysian future without oil and gas.

Last year, Petronas reported RM52.5 billion (S$21.6 billion) in profit on revenues of RM264.2 billion, making it Malaysia's most profitable company. And it is something of an irony that Petronas's international debt ratings are slightly higher than the Malaysian sovereign.

Mr Hassan can take a bow and exit - gracefully, with his head held high.
(Source: The Business Times (Singapore), 1st February 2010. Picking Petronas' new helmsman.)