26 February 2010

BMW Sauber F1, Petronas, Mercedes

BMW Sauber

On the website for the BMW Sauber F1 Team, the following words appear: "After four years with the BMW Sauber F1 Team, BMW is turning its hand to other motorsport projects from 2010, while the Sauber Team aims to follow on from the success shared during this period." (Ref: BMW Sauber F1 Team website, accessed 26th February 2010) A link on the site brings visitors to the new BMW Motorsport website, whereas Team Sauber's website will soon be accessible.

On 1st February 2010, Paul Tan, automobile scene blogger, wrote a piece about a sponsorless BMW Sauber C29 being launched. The car does not sport any sponsor logos as yet, but may soon be decorated by logos of the drivers' personal sponsors. (Ref: paultan.org, 1st February 2010. Sponsorless BMW Sauber C29 launched.) It was noted that BMW had exited the sport, but red tape and lack of time necessitated the name "BMW Sauber" to be retained for this season's race. It was uncertain whether the name would be used in the next season. The C29 is powered by a Ferrari engine. (Ref: ibid.) In short, Team Sauber has ceased its partnership with BMW and lost its sponsor, Petronas. (Ref: Bleacher Report, 4th February 2010. Formula One 2010: A Winter Full of Change and Intrigue.)

Sauber

Sauber is described as a "Swiss Formula One constructor ... founded in the 1970s by Peter Sauber, who progressed through hillclimbing and the World Sportscar Championship to reach Formula One in 1993." (Ref: Wikipedia, entry on Sauber. Accessed: 26th February 2010.) On 24th February 2010, it was speculated that Sauber's absence from this season's Formula One list of contenders meant that Stefan GP, a Serbian Formula One team, was joining the fray. (Source: crash.net, 24th February 2010. Mystery surrounds Sauber's absence from entry.) On the same day, it was reported that Sauber had appointed James Key as its new technical director. Mr Key was a designer at Lotus for two years before launching an illustrious career at Jordan, rising leaps and bounds through various management changes. (Source: Pit Pass, 24th February 2010. A Key Move At Sauber.) A report two days later stated that the BMW Sauber F1 Team will be training 18 year old Esteban Gutierrez as a race driver. Peter Sauber was quoted saying, "We view this link-up as a kind of sponsorship arrangement." By taking the young Gutierrez under its wing, Sauber would be giving his an opportunity to learn about the industry, while at the same time potentially having a winning driver at its disposal. (Source: Pit Pass, 26th February 2010. Sauber to support Gutierrez.)

Petronas and Mercedes

On 21st December 2009, Reuters reported that Petronas would sponsor the Mercedes Formula One team next season. (Ref: Reuters, 21st December 2009. Motor racing-Petronas to sponsor Mercedes F1 team.) The report showed that Mercedes was enthusiastic about Petronas' sponsorship.

"The new title partnership also paves the way for future collaborations between the two companies," Mercedes added in a statement.

It said Petronas would be able to "generate sustainable business growth, particularly in their downstream lubricants market, through the strategic partnership and business alliance with Mercedes-Benz."
(Source: ibid.)

However, not everyone was happy. The BMW Sauber Formula One team was left bereft when BMW exited the sport; the loss of sponsorship was surely a blow for them. Lotus F1 team boss, Tony Fernandes, also CEO of AirAsia, lamented Petronas's choice not to sponsor it as Lotus is owned by national car maker Proton. (Ref: ibid.)

Local blogger BigDogDotCom lauded the move as a financially rewarding development for Petronas and the nation. (Ref: The Thirteen Million Plus Ringgit Guy Rambles, 22nd December 2009. Petronas-Mercedes GP deal is beneficial for the nation.) From his blog:

The most important reason is that Petronas will immensely benefit from this Mercedes GP deal. From 2010, all Mercedes Benz cars in China, Turkey and UK markets assembled will be ‘first-filled’ and subsequently serviced using Petronas Synthium lubricants. For the first year alone, the business is expected to be in excess of RM 200 million. Within five years, the business will be expected to be in the neighbourhood of RM 1.5 billion, especially when Mercedes open other markets as well for exclusivity with Petronas lubricants. It will make Petronas lubricant products grow into markets previously enjoyed by Helix, Castrol, Agip and Duckhams.

...

This is the third success story of Petronas this year under the stewardship of Tan Sri Hassan Merican.
(Source: ibid.)

Could this latest move by Petronas have had anything to do with Tan Sri Hassan Merican's not being reappointed as head of Petronas? Is it indicative of some of the conflicts between Proton and Petronas? That question makes for highly entertaining reading, but is a matter for another article.

Lotus

Alex Yoong, Malaysia's first and only Formula One driver, was reported as being unhappy with the decision.

“Petronas started F1 as a branding programme,” he is quoted as having said by the Malaysia Star newspaper, “but we have since moved into the business. We had a very good relationship with Sauber that exposed our brand and gave us the opportunity to go global with our lubricants.

“It was also timely when BMW took over Sauber, and that gave us an opportunity to partner with an original equipment manufacturer. The years we were together with BMW and Sauber, we benefited from the lubricant business. Next year, we have no team and the only reason for us to go back into Formula 1 is on a business deal, for the lubricant business.”
(Ref: crash.net, 22nd December 2009. Ex-F1 star expresses his 'shame' at Petronas/Mercedes tie-up.)

In a development that echoed Sauber's latest move, Alex Yoong was reported saying that Lotus would select three young drivers for its development programme, with a possibility that one of the drivers would ultimately become a Formula One driver. (Ref: AsiaOne Motoring, 26th February 2010. Daim may join Lotus team.)

24 February 2010

Fuel Prices Stay Put

The much touted upheaval in the fuel price will not come to pass. The Government has announced that the controversial plan to implement tiered fuel pricing via MyKad identification, will be shelved. (Source: The Sun, 24th Feb 2010. No go for tiered pricing.) Fuel subsidies will continue for the meantime. The plan was called off due to the logistics horror that would ensue from having 15 million people queue up at the National Registration Department, simply to enable their identification cards as a means of identifying whether they qualify for subsidised fuel.

The system, which would have been known as ePetrol, was detailed in a report by the Star dated 26th May 2008. (Ref: The Star, 26th May 2008. How ePetrol system works.)

(Update) The Malaysian Insider reported that the Government pulled the plug on the plan after complaints from consumers and petrol dealers, who worried about long queues at petrol stations. Despite that, an unnamed industry insider was quoted saying, "...the authorities will find another way to implement subsidies without burdening the public and the petrol dealers." The report speculated that the Government may raise retail prices by 10 sen while a new mechanism is being devised, in light of the rising price of oil. (The Malaysian Insider, 26th February 2010. Government scraps tiered fuel subsidies for simpler ways.) The Malaysian Insider also mentioned that the MyKad tiered subsidy scheme would have been handled by Malayan Banking Berhad. (ibid.)

Hoax?

There seems to be a hoax circulating on the Internet. In a dubious news report by "SkyNet News Asia" dated 8th January 2010, Finance Trade Minister Tan Sri Anuar Ali announced that come May 1st, RON 95 and RON 97 would be priced at RM3.70 per litre and RM3.90 per litre respectively. Malaysian produced vehicles would be cheaper by at least 40% while import duty imposed on imported vehicles would be 30% only compared to the present 200%. A cash rebate for vehicle owners of smaller CC cars was also being considered.

The said reported has been criticized by various bloggers as a hoax. It seems that there is no such news agency called "SkyNet News Asia", nor is there such a portfolio as the Ministry of Finance Trade. Nor has anyone heard of Tan Sri Anuar Ali. Here are some of the discussions:


The report is also sloppy, quoting a certain Ahmad Tajuddin about the fuel rebate but failing to introduce the said Ahmad Tajuddin earlier. The words "who own a 1,500cc and below vehicle" and "The amount have yet to be decided" also seem to be ungrammatical.

For the record, our Ministers in Cabinet affected by this hoax are as follows:

  • Minister of Finance - Najib Tun Razak
  • Minister of International Trade and Industry - Mustapa Mohamed
  • Minister of Domestic Trade, Co-operatives and Consumerism - Ismail Sabri Yaakob
Readers can check the list of Cabinet members at Wikipedia (accessed 24th February 2010). (Alternative reference: The Star, 9th April 2009. Najib names 28-member Cabinet (Update 6). Also refer to Utusan Malaysia, 9th April 2009. Senarai penuh barisan Kabinet baru.)

The moral of the story is to exercise a healthy dose of skepticism whenever we read articles forwarded in the e-mail. Always check with an authentic reference, preferably a syndicated newspaper.

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.)