* (a letter from Sarawak's sons and daughters to the Prime Minister)
* respect for the Prime Minister, *
We know that Petronas is a "national company". However, although it is legally a Malaysian company, it is essentially a de facto Malaysian company. Its operation, investment, economic focus and decision-making process show that it mainly operates as a Malayan peninsula company. Think carefully about the point I'm going to make. I am willing to correct any inaccurate information, but I will not apologize for proposing to solve these unfair problems.
In case you forget, remember that Sarawak has 60% of Malaysia's natural gas reserves and 40% of Malaysia's oil reserves. Sarawak has made great contributions to Petronas and the country. Sarawak made Petronas, not Petronas made Sarawak. In view of this, an honest question must be raised. Is Petronas really a Malaysian company? We want a direct and honest answer. If you don't think so, please reform immediately and don't hesitate. Avoid the usual means of forming cabinet committees, parliamentary committees or special committees. We are tired of the endless meetings of committees and the absence of or disgusting resolutions. If Petronas is indeed a national company, then we urge our Sarawak leaders to take immediate steps to ensure fair treatment.
The vast majority of Petronas's main operations and decision-making centers are concentrated in Malaya. Headquartered in Kuala Lumpur, the company is the symbolic and functional center of its activities. Facilities such as the iconic twin towers highlight its peninsula-centric operating base, while the significant contributions of Sarawak and Sabah have been marginalized.
Most of Malaysia's oil and gas resources come from Sarawak and Sabah. However, the economic benefits and infrastructure development brought about by these resources are unevenly distributed. Sarawak and Sabah are still decades behind the peninsula. Petronas's contribution to the national budget is mainly used for federal projects and infrastructure development in Malaya. Despite their rich resources, Sarawak and Sabah lag behind in development indicators such as health care, employment, poverty, education and infrastructure. This gap further reinforces the perception that Petronas mainly serves the economic agenda of the Malayan peninsula.
Royalties are another obvious unfairness. The royalty arrangement provides a meagre 5 per cent income for Sarawak and Sabah, while the rest is used to support federal plans, most of which are concentrated in Malaya. Let's further explore and analyze the 5% royalty. I suspect that 5% of royalties are manipulated and influenced by accounting skills and do not reflect market reality. Petronas also sells natural gas at subsidized prices to Malaysia's national energy and peninsula's independent power producers. Their task is to provide electricity only to the Malayan peninsula, not to the country as a whole. The question is whether the 5% royalty has been adjusted to reflect the market price. I doubt it.
The annual dividend of RM30 billion and billions of ringgit taxes and surcharges paid to the government are also used to repay the government's debt of RM1.5 trillion. However, how many of these 1.5 trillion ringgit went to Sarawak or Sabah? 1MDB is a typical case. We were surprised to learn that 1MDB was buying oil and gas assets. Isn't Petronas authorized to do this? There must be something sinister about it. Perhaps purchases made by companies other than Petronas are more likely to be misappropriated. In the process, 1MDB was deceived and tricked into buying assets that did not exist or were unknown. This is a kind of karma. The public, especially Sarawaks, want to know whether similar transactions have been carried out, are under way or are being planned. With the exception of 1MDB, most of the loans are used to finance projects in the Malayan peninsula, such as light rail, MRT, Kuala Lumpur International Airport 2, East Coast Railway and Johor RTS. Sarawak people do not feel the existence or benefits of 1.5 trillion ringgit loans. All I know is that the loan will be used to finance the unfinished Pan-Borneo Highway.
The non-core luxury assets invested by Petronas are concentrated in Malaya Peninsula. Malaysian national oil company owns Sepang track, an orchestra, a university, Kuala Lumpur city real estate, Bucheng holding and so on. The choir is not good enough for Petronas. How many Sarawaks and Sabas are there in the orchestra? How many times has it been performed in Sarawak or Sabah? The National Petroleum University of Malaysia is located in Perak, which has no significant contribution to the oil and gas industry. Why should Petronas own a university? Isn't it more practical to set up a chair or sponsor a faculty at a local university? Previously, it even owned a loss-making hospital, Prince Court. These investments have raised questions about Petronas's business model.
Global giants such as Google, Apple, Amazon, Meta, Tesla and Microsoft all focus on research and innovation and buy strategic assets to maintain competitive advantage and sustainability. Unlike Petronas, they do not go on a buying spree of luxury unrelated assets.
The vast majority of senior leadership positions and key decision-making positions in Petronas and all its subsidiaries are held by individuals from the Malayan peninsula. Sarawak and Sabah are grossly underrepresented, highlighting the lack of governance sensitivity of a company that relies heavily on Sabah's resources.
In addition, the creation of the post of nominal adviser for the former Prime Minister further highlights the peninsula-centric approach. By extension, the vast majority of the senior leaders of all government oil companies, government investment companies, government investment companies and government agencies are individuals from the peninsula. Therefore, not only is Petronas a de facto peninsula entity, but also the whole country is a de facto peninsula government.
Once upon a time, Sarawak owned a refinery in Meri Luodong, the first refinery in Southeast Asia. However, its downstream operations have already moved to Malacca, Bodshin and Kodadinyi, and the establishment of the Bian Jialan petrochemical complex, resulting in the loss of billions of dollars in wealth, jobs and businesses in Sarawak. Arguments based on sustainability, market accessibility, or shipping routes are unimportant and cannot explain this blatant marginalization. If Brunei can maintain its downstream activities and Singapore, though not a producer, can develop into a major oil and gas hub, why not Sarawak?
Not long ago, a video circulated on the Internet in which Donggu Lashari admitted that UMNO had embezzled 1.4 billion ringgit from the Malaysian national oil company. I suspect that this has happened over time, so the misappropriation of the money may also have happened during your term of office before you became finance minister. When the video was made public, you and your opposition colleagues did not deny it. The scandal, coupled with suspicious asset purchases, has further raised concerns about whether Petronas will be subject to similar abuse in the future.
Sarawaks have long endured unfair treatment caused by Petronas and the federal government. Now is the time to act decisively.
We urge Prime Minister Sarawak to recall all leaders who love Sarawak and, in particular, to bring politicians back and use their expertise to put Sarawak on an extraordinary path of development. Let alternate officials serve the federal government until they are ready to serve Sarawak.
Before real reform, Petronas was seen as an offender of Sarawak.
Sincerely
* Sarawak sons and daughters *
Winter 2024
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