Bailout for Sapura? Stop choking “golden goose” Petronas, economist fumes

Bailout for Sapura? Stop choking “golden goose” Petronas, economist fumes




IRRITATED by calls to get Petronas to bailout the beleaguered Sapura Energy Bhd (SEB), an economist took to social media to remind all quarters to leave the national oil giant alone.

“You want Petronas to bail out its vendor? Rubbish. At the same time, they want dividends from Petronas.


“Who knows, maybe they will get Petronas to pay for East Coast Rail Line (ECRL) later. Let us choke Petronas to death,” said economist Nungsari Ahmad Radhi.


On May 12, former prime minister Datuk Seri Najib Tun Razak suggested for Petronas to acquire SEB to avoid the company from being declared bankrupt.


He added that Petronas has the expertise to revitalise the company. The Pekan MP also mooted for SEB to be given a Government-guaranteed bank loan.


“After Petronas has acquired SEB, the national oil company can guarantee its RM7 bil worth of contract and resolve it, in addition to providing a solid working capital for the O&G company.

“Once SEB has been rejuvenated, Petronas can sell it off. When that happens, Petronas and Amanah Saham Bumiputera will benefit,” Najib said in a debate with Opposition Leader Datuk Seri Anwar Ibrahim.

On that note, Nungsari said that Petronas should be contributing to the National Trust Fund (KWAN) to secure the nation’s finances for future generations.

Instead, he added, the Government dipped into KWAN funds to purchase COVID-19 vaccines as Putrajaya did not have money back then.

“It looks like we keep spending without even considering to need to save for our future generations. The time will come when we will no longer have petroleum generated funds,” Nungsari quipped.





Expand the economy

The veteran economist added that the Government has to do more to expand other sectors of the economy to diversify its revenue stream instead of depending on petroleum cash alone.

“And Petronas itself is not doing that great as we continue to depend on it. Its position as a Fortune 500 company is taking a toll.

“For instance, in 2020, Petronas lost RM21 bil but still had to provide a dividend of RM34 bil to Putrajaya,” Nungsari mentioned.

In report published by the Yusof Ishak Institute (ISEAS) entitled “Malaysia’s Oil and Gas Sector: Constant Expectations despite Diminishing Returns”, the think-tank urged Putrajaya to revise their expectations of the oil and gas (O&G) sector in general, particularly Petronas.

“While expectations of the O&G sector have been constant, possibilities of endlessly tapping this resource to underpin public spending, continuously boost GDP and promote domestic entrepreneurship are rapidly diminishing.

“These unchanging expectations also place considerable pressure on Petronas to continue making substantial contributions to public coffers.

“Unless mitigated, this threatens the ability of the company to remain viable and to stay at the technological forefront,” the report noted. – May 15, 2022