Politics in general / Socio-economy

The fate of Petronas

Petronas is a sensitive subject. It is the pride and joy of Malaysians. One of a few Malaysian companies that could make into Fortune 500. It is a Malaysian company where it should think about Malaysians first. Obviously, people would not want Petronas to flounder after achieving so much. That is why, Petronas would receive so much criticisms if it is perceived as being mismanaged or abusing the people’s trust.

Hence, when rumours broke out last year about Petronas going to be ransacked, almost everyone jumped out from their shoes and raised the alarm.

This year is no different, albeit in a much more muffled setting. I guess news like this should not be overblown as it will give the new PM extra headache in his first 100 days of being the Premier.

But I have a few questions to highlight should this not a done deal already.

First, to explore on the media statement of Lim Kit Siang last week. It stated:

Najib should clarify once and for all whether former Home Minister, Datuk Seri Syed Hamid Albar has been appointed Petronas Chairman and if so, explain why a person deemed unfit to continue as Cabinet Minister as to be dropped in the recent reshuffle should be considered proper material as Petronas Chairman.

Furthermore, whether Omar Ong, one of the Putrajaya “Level Four” boys of former Prime Minister, Datuk Seri Abdullah Ahmad Badawi has been appointed non-executive director of Petronas, with a view to his future appointment as Petronas CEO and replacement of Tan Sri Hassan Merican next year – as well as the basis and criteria for such an appointment.

I guess his points are valid. Thus this article is written so that the PM and the public, and the BOD of Petronas should know what the issues that will surface should those points are not verified.

The first point is a clear cut misgiving towards the said politician. But the second point is very vague. How could Lim Kit Siang know the machinations of what the PM’s inner circles are planning? Does he know something we do not?

Since there was a little commotion in the blogosphere involving the alleged appointment of one Mr Mohd. Omar Bin Mustapha as the Non Executive Director of Petronas, I guess we all need to know a little bit more on the issues here.

Indeed, what are the basis and criteria for such an appointment? What had Mohd Omar done to receive such an appointment? Is it because of his track records? Is it because of his close proximity to the PM? By the way, he was the Special Assistant to Najib  when he was the DPM. These are two strongest aspects that need to be studied.

From risk management point of view, if the impact of the latter overshadows his track records, then it will not augur well for Petronas.

Should someone who is perceived to have the ears of the PM, or someone that the PM is smitten with (not in sexual kind of way of course) be appointed as the director of Petronas, naturally all board decisions will subconsciously be based on what this person will deliberate.

There will be a subliminal need by the rest of the board to agree with whatever he says as he will have the reputation as the PM’s right hand man.

It is human psychology. And I tend to agree with what a commentator said here. In most parts he/she is correct although he/she was wrong when he said Omar is the current Special Officer of Najib.

But to the understanding of many, Omar is construed as having an extremely close relationship with Najib as an unofficial advisor.

The gist of that commentary gave a valid question – is it prudent to have someone so close to Najib as the director of a Petronas where such appointment may open up avenues to abuse the position?

Is there any risk mitigating plans to overcome this potential risk in the future? Can the rest of the board members be trusted to be thoroughly objective in their decision making process for the sake of our country?

Hopefully, the board had enough foresight to see any oncoming backlash ahead.

I am sure Omar is a highly dedicated and brilliant person. But will Petronas benefit from his experiences and network? Obviously, it is up to the board / PM to decide on this appointment. We are just giving input of the matter.

Speaking about experiences, Ethos Consulting developed the National Automotive Policy (NAP) in 2006 whereby as the result of its specific policy instruments (surge in AP approvals, new excise duty structure, availability of grants for local and foreign car manufacturers etc) had greatly diminished Proton’s legacy as the leading brand in Malaysian automotive industry. But Omar could not have been involved in the development of the NAP as he was working under Najib directly back then.

Ethos also is  commonly known to be involved in many government sponsored projects  such as the trillion dollar economic corridors, the proposed takeover of IJN by Sime Darby, development of KPIs in a couple of GLCs, Felda’s divestment of assets and many others.

The list is impressive and not many consulting company can boast of having secure critical governmental projects  within a short span of its operating life.

But the board of Petronas should be wary of the network reach of Ethos when one of its director is one Ian Craig Buchanan.

Buchanan is the Senior Executive Adviser of Booz Allen Hamilton.

Booz Allen Hamilton meanwhile is the leading US strategy and technology consulting firm which advises on the defense and security policy of the US.

Unless there is a massive ‘chinese wall’ and water-tight non disclosure agreements in place, the board should not be too hasty in letting a conduit to a foreign think tank be too close within the gates of the biggest breadwinner of Malaysian government.

From risk management point of view, this board will have to decide on one of the crucial decision it has to make this year. We hope that there will be enough angles that are covered during the meeting to decide on this. Is his appointment really in view of him being the future Petronas CEO? Again, the public does want to know the basis and the criteria for such appointment.

In the mean time, let us wish the board members a good weekend ahead.

31 thoughts on “The fate of Petronas

  1. It is all about the old bugbears of openness, transparency and accountability where Taxpayers’ money is concerned.

    We are now seeing once again the elevation of failed politicians and suspect so called professionals to the Board of Quangos as Directors and ‘Advisors’.

    Yet, where Proton and Petronas are concerned Dr.Mahathir does not seem to have been asked for ‘Advise’ on some major issues which begs the question why these luminaries are there enjoying perks and benefits which easily exceed by a facator of three or four, the average wage earner’s remuneration package. And we really have to scratch our heads and ask what ‘Advise’ the sleeping ex-OM will offer to MAS to make it more profitable.

    If truth be told, much of what Petronas does and how its huge profits are utilised by Govt have been shrouded in a veil of secrecy. Petronas has been the whipping boy for many of Dr.Mahathir’s and Govt’s excesses over the years.

    In all the recent hullabaloo over JPA scholarships, most have forgotten that Petronas operates a University and awards scholarships as well. Few outsiders have any idea of the selection criteria that Petronas pactices and whether they comply with the Minister’s promise in Parliament of a 55% – 45% mix.

    Omar Ong brings with him the (alleged) baggage of Ethos consulting and ill-conceived (from national security point of view) secret and murky deals and huge commissions over sale of Telekom and Pantai Hospital shares, aborted takeover of IJN, new LCC Terminal and a host of other mega ‘deals’ not open to just any consuling firm.

    There is huge suspicion that an attempt is being made to prise open the closed shop that Petronas has become, not so much to improve transparency, as to displace an old regime and perhaps engage in one more rifling of the ccokie jar before old mother hubbard’s cupboard is finally, truly bare!

    As for the proposed appointment of Albar to the Chairmanship of Petronas, what can one say? Gaji Buta jobs for the boys?

    It is for these reasons that Petronas MUST be removed from the vice-like grip of the PM’s office and inteference from politicians. Many in fact wiah to see no change to the current policy, arguing spuriously that it actually shields Petronas from political inteference. But the PM is the 1st among equals in Politics, not the Mother Teresa Charity. Therefore, it is agiven that political inteference and manipulation WILL be the order of the day.

    Huge MNC’s and public listed corporations operate in the markets of the world sujbect to mandatory disclosure requirements of Security Commissions and Stock Exchanges.

    Why should Petronas be any exception?

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  2. Is there a need for another director? Who resigned recently? I see no value added if omar is in. What more can he achieve for petronas?
    A giant like petronas has been performing above par.

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  3. Dear JMD,

    Why must Omar Ong be appointed? Why must such prestigious company like Petronas must be influenced by goverment. If Najib is serious in “cleaning” up BN or UMNO image, he need to seriously think about this decision.

    I don’t think Omar Ong should be given the position as if he cannot even pay his study loan, how can he run a giant company like Petronas. Wonder what is TDM’s perception on this matter? Or maybe they want to sack TDM to from being Petronas advisor?

    We are letting “foreign” people to dictate and steal our country secrets, are we selling Malaysia? Are that stupid? If i’m the PM, I would not allow such influence be involved in the matters of this country and those people who are associated with such link must be detained for espionage and treason!

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  4. Dear JMD,

    One area where decisions must be made on sound and prudent judgement, and without sentiment – political appointments.

    We have seen many an occasion where political appointees having less than desirable performance as compared to predecessors. Or up to expectations and even failure.

    The person must not appointed just because he/she is a trusted person or advisor or whatever to the one who makes this decision. One is appointed because he/she has the prerequisite qualifications, experience and dedication for the position.

    Should the appointee fulfill the above criteria,so be it. The appointee must not only be but seen to be above politics.Then there is a question of perceived conflict of interest and transparency to consider. There would also be a strong assumption of indebtedness and any decisions by the appointee thereof will be seen to be a manifestation of his/her political master.

    With political appointments come considerable power, perceived or otherwise, by those within ambit of the new functionary. There will definitely be trepidation by those within the confines of the office and this would not be conducive for open and constructive discourse or criticism.

    What is most objectionable or unacceptable is to appoint for ones’ personal agenda and self interest. The net result of such an appointment almost always end up in disatisfaction within and without, economic loss and scandal. With this come public odium and loss of faith in the Govt.

    When a decision is questionable and unpopular among the rank and file, the result is also the same. Case to point is Proton.

    To be flagged by LKS is disturbing. It already implies a perceived anomaly. Has the bitter lesson not been learnt? Is this another political subterfuge?

    As the family jewel of all Malaysians, might I suggest that appointment and removal of directors together with the highest executive officer in Petronas, be subject to parliament approval.

    Regards
    Freddie

    JMD : Very valid suggestion you have made. Thank you.

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  5. never seen such paranoia….omar ong…a nerd. shit i cant believe we are paranoid of a nerd.

    JMD : I am guessing you do not know Omar that well then. To me, Omar is definitely not a nerd. Give some credit to the guy. Thank you.

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  6. I feel very sad to see all the Umno morons and BN gangs here.

    No wonder so many good talents left Malaysia from year to year.

    If we want a good country – we must destroy the Umno party first.

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  7. ah, Petronas and its endless saga of greedy people trying to dig into nation’s most wealthy company. if appointment of Omar Ong do really take effect, this thing really reminds me of TDM words sometimes ago :

    http://chedet.co.cc/chedetblog/2008/12/abdullahs-march.html

    point number 11 to be exact..

    .. 11. Najib is going to be surrounded by Abdullah’s people and through these people Abdullah will control the Government of Najib…

    i do feel that this point stated by TDM will be made valid once Omar Ong appointed as Director of petronas. but in the first place, why on earth Najib wants to interfere with something that is running rather smoothly? if Omar Ong is very capable young chap, then he might as well get appointed to other not-so-well-doing GLC such as TNB, Proton, MAS. then his “talent” and “capability” will be much use for the nation.

    Beside Ethos and Special Officer to Najib, i wonder what is Omar Ong credential that enable him to qualify to take this high post. has he had any significant experience that worth being highlighted? some link from your blog really worth reading :

    http://anotherbrickinwall.blogspot.com/2009/05/omar-ong-to-advance-tingkat-4-agenda.html

    and another one..

    http://bigdogdotcom.wordpress.com/2009/05/25/an-appeal-to-omar-ong/

    Maybe najib should look into somebody with rather solid background of oil and gas industry combined with seasoned sets of management and technical competency, since Petronas is indeed a very complex engineering company. Petronas already have pool of professionals that are that were groomed to be future leader of the company, why take somebody from outside to be in BOD? moreover, they are more converse with oil and gas industry, malaysian petroleum and most of all Petronas culture.

    I do feel that this appointment is stinky fishy. 38 years old is far too young to be director of billions dollar company, running billions dollar national reserves with billions dollar technology, suported by billions dollar contractor and vendor.

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  8. salam jmd,

    saya cuba mencari di mana najib nak bawa kita dan macam mana di nak bawa kita ke hadapan. selepas 2-3 bulan masih belum jumpa. kita masih di sini dan dalam beberapa perkara – ekonomi terutamanya , kita dan kebelakang. lebih kurang macam zaman pak lah. masa dia masuk kerja dulu, rasa syok, optimistik, sekarang rasa tak da apa apa pun. agaknya macam mana tun mahathir rasa? kalau 2-3 bulan lagi ie 6 bulan dia jadi pm, dan tak nampak apa apa, rasanya tun akan mula belasah dia. kalau tun mula, kita semua kena joint in lah.

    wasalam jmd

    JMD : W’lam Hanafiah. Terima kasih kerana memberi komen.

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    • Apa khabar Abangcina,

      Orang bicara dengan baik, awak cakap gaduh.

      Orang cakap pasal menjaga kepentingan Petronas demi kebaikan rakyat, Awak cakap pasal UMNO, pasal wang.

      Tanah melayu sudah bangun lama dah. Awak baru bangun ke? Berapa tahun tidur?

      Petronas ini datang dari mana?

      Tanah air Thai? Singapore? Indonesia? Cina? India? US? Russia? Iran? Saudi? Perancis? UK?

      Cuba teka. Saya rasa pertanyaan ini susah sangat untuk lu.

      OK, lah.

      Soalan senang sikit. 1×1 is 2 atau pun 1×1 are 2?

      Ini cabaran saya.

      Hehehe
      Freddie

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      • Tanah Melayu ada minyak tapi Melayu tanah yang rugi la! Petronas tu kepunyaan orang Malaysia termasuk aku dan awak.

        Tapi orang Melayu tanah terlalu bodoh senang ditipu orang2 muslim UMNO dan sultan2 yang liar berkorupsi tapi masih di sembah. Bodohnye……….

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        • bila Petronas mula2 ditubuhkan, you chinese semua kutuk saja, pandang sebelah mata pun tak mau. kononnya Petronas akan bankrupt dan takkan berjaya.

          berpuluh tahun Petronas maju dgn tenaga kerja ~95% Melayu, sekarang Petronas sumber pendapatan terbesar Malaysia. combine all your Chinese tai kor companies pun belum boleh lawan Petronas punya wang tahu!

          Sekarang Petronas punya wang besar, Chinese macam you ada hati mau mengaku itu Petronas lu sama-sama punya juga kah???

          CHIT POODAH !!!
          MUKA TAK MALU PUNYA *******

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          • Malulah you pemalas kekayaan orang2 Cina tu adalah hasilan dari ilmu dan ketekunan diri, bukan macam lu berkorupsi, mencuri dan yg bodoh tunggu saja durian jatuh dari langit lo.

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            • @ Abangcina

              Ketekunan ****** bapak kau!

              If Petronas people (who are ~95% Malay) are all pemalas, then Petronas would have NEVER been the country’s major cash generator!

              Apparently you just can’t accept the reality that ONE predominantly-Malay corporation has been generating MORE money to the country than ALL Chinese-run corporations combined! Obviously that’s all, nothing more!

              Ada hati mau mengaku lu sama-sama punya!!!

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              • eh lu tau apa…..Petronas takda ilmu, takda teknologi, tak tau cari, tak tau korek, tau tau angkat duit sewa, kongsi macam alibaba la.

                Lagi minyak tu kebanyakan datang dari Sabah, Sarawak. Itu lu nenek punya ka???

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  9. woi abangcina bodoh bahalol

    kalau Petronas takda ilmu, takda teknologi, tak tau cari, takkan lah masuk ranking Fortune 500!!!

    BODOH !!!

    baru aku tau, **** nih kalau kena yg bodoh tu memang BODOH SUNGGUH !!!

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  10. @ abangcina bodoh again

    Sabah & Sarawak tu majoritinya apa? Bumiputera juga kan? dan banyak Melayu juga selain Iban, Dusun, etc etc… and still, Malays make an overwhelming majority of professionals running a Fortune 500-ranked corporation named PETRONAS. That’s a FACT. Tapi kau ni bodoh sangat.

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    • eh lu, MAS dah minta ampun, Proton pun dah dekat sama kuburan, suruhlah Melayu2 profisialnal di Petronas pindah rumahlah ke sebelah…kan orang pandai mesti tolong orang bodoh sama2 bulu kan.

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      • yang BODOH tu kepala datuk nenek kau.

        sebab tu kau irihati snagat dgn PETRONAS sebuah syarikat yg kebanyakan penggeraknya Melayu, tersenarai dalam ranking FORTUNE 500.

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  11. We are agreed that it takes more than just good brains to run an institution like PETRONAS. The person chosen to helm PETRONAS to replace TS Hassan Merican is to be endorsed by the rakyat. PETRONAS is the crown jewel belonging to the Rakyat.

    The person entrusted to make the choice to replace TS Hassan is the PM. DSNR cannot just use his own judgement but must feel the pulse and feelings of the rakyat.

    Though Omar Ong may have the excellent credentials to be on the board of PETRONAS, the feelings of the rakyat are against his appointment. To ignore this sentiment is tentamount to giving more ammunition to the PR to garner more votes in the PR13. The PM under PR Government after PR 13 will surely sack Omar Ong and put some body that the Rakyat endorse.

    Already the PETRONAS Board refused to endorse the appointment on the ground that Omar Ong violated his bond as PETRONAS Scholar. DSNR is adament to get Omar into PETRONAS.

    To DSNR , please be wise by forgetting Omar and do not add another scandle into your stable.

    Like

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