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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

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