Petronas’ RM600 billion profit: Where has it all gone?
So the figure has been revealed. Petronas’ group profit before taxes, royalties, dividends and export duties amounted to RM570 billion for the period from its establishment in 1974 to 31 March 2007.
If you include the figure for the period until 31 March 2008, then you are probably looking at a figure closer to RM700 billion, with the higher oil prices.
Let’s see the breakdown of that RM570 billion:
Payments to the government (royalties, export duties, taxes and dividends) - RM359 billion
Allocations for shareholders, royalties and taxes abroad - RM41 billion
Profits re-invested in Petronas operations - RM170 billion
Total RM570 billion
(In case you are wondering where I got these figures from, they are from an oral response in Parliament to a question put forward to the Prime Minister by the MP for Bagan, Lim Guan Eng.)
So the government has received RM359 billion from Petronas over the years. If we include the year ended 31 March 2008, the figure would be in the RM400 billion range.
The big question is, has the government made the best use of all that money? You and I know the answer to that. If the money had been used effectively, we could have provided affordable housing for everyone in this land, invested in an excellent public transport system and come up with a first class public health care system providing universal access to all Malaysians.
But have we? Look how much has been wasted and squandered over the years. Think of all the natural gas subsidies dished out by Petronas to the Independent Power Producers (private electricity companies), which have been raking in billions in profits over the years. (And now they want to reduce the subsidies for ordinary Malaysians.) Think of the billions spent on bailing out banks. And remember the colossal sums spent on building Putrajaya, building the Twin Towers, hosting the Malaysian Grand Prix, sponsoring the Petronas racing teams and setting up the Malaysian Philharmonic Orchestra. All this while there are people without homes of their own, without a balanced and nutritious diet, without electricity and water in rural schools…
It is truly a lost opportunity, considering that we will soon become a net importer of oil in a few years’ time.
Meanwhile, ordinary Malaysians have no access to Petronas’ detailed accounts. Where is the accountability and transparency in the use of these massive amounts of public funds?
- Petronas barrels in record RM96b profit as oil prices soar
- Why are we subsidising the profitable IPPs?
- Why is Petronas delaying release of financial results?
- Petronas accounts: Let’s see the detailed Profit and Loss A/c
- Buying ‘goodwill’ – RM4 billion worth of it
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ask the big spenders Mahatir and Badawi. How they enrich their cronies in the name of NEP. How sad when Terengganu has the largest budget but end up as one of the poorest. the same goes with Sabah. Wonder the ruling politicians have no conscience as they… plunder while the people suffers. And they are doing it for the sake of their kind? what rubbish.
When we are still a net exporter of oil, we should be celebrating with the high oil prices. Yet, our government complain about the fuel subsidies. I am sure most people cannot understand the reasons why unless clearly explained to us.
Record prices in palm oil and rubber have seen bumper profits from plantation companies. Even rubber tappers are earning more than some executives while enjoying the lower costs of living in the rural areas.
It starts with the mistress,cronies and of course jets,holidays,concerts the list goes on and on.
The oil monies could have been spent on improving the mass rapid transit rail with increased coverage/efficiency so there is less dependence on using private vehicles to commute to work. With our deep reserves in LNG, this government could/should have encouraged conversion of hybrid vehicles which uses LNG and petrol, together with the infrastructure for distribution of such fuels. So is there vested interest at play ? Also in time the national car could also see self destruction as other global car manufacturers are moving to hybrid electrical and petrol vehicles whilst we slumber with propping up of inefficient technologies. Nero fiddles whilst Rome burns !!
Masa untuk kerajaan baru: kerajaan Pakatan Rakyat!
Oh how elusive and slippery is the oil money
Not shared so well in hives like bees’ honey
No wonder so many have to work hard as donkeys
While some enjoy the fruits like privileged monkeys
(C) Samuel Goh Kim Eng - 030608
http://MotivationInMotion.blogspot.com
Tue. 3rd June 2008.
If this not a strong case to get rid of BN once and for all, then we all deserve to be label as Stupid Malaysians for putting up with such a government.
Don’t blame anyone else for our choice.
Accountability is never present in our public officers.
whatever we complain, how many suggestion we give all not use. we r talking to deaf goverment. they dont care. if they listen to us before, our country is the best in south east asia. so BN goverment pls step down. give a chance to pakatan rakyat, see what they can do for another 5 years. public r the judge, we wiil decide wich goverment we want. we already decide so plsssss.
I say that if there were anyone out there who could kick the BN a**es out, please propose and let’s get it done. They have brought our beloved country deep in s*** and if nothing were done, we would soon lose all hope for us and for our children. Please…please…let’s help our country to get back on its own two feet and regain our pride.
The PM accidently vomit the secrect and you caught him.
If not is another OSA.
rajraman-still unable to count my first million throu hard work and now the 600billion you brought up hit my brain like tsunami.
WHEN MORONS RULE THIS COUNTRY FORGET COUNTING THE BILLIONS LOST IN BEETWEEN.
WHEN THE CARETAKER OF THE LAW BEHAVE LIKE THUGS,FORGET ABOUT REPORTING TO THE T**** IN THE BLUE UNIFORM.
WHEN MR.CORRECT RULE THE COURT FORGET ABOUT YOUR JUSTICE.
I rather have a good sleep rather reading all the above morons,thugs and correct rule this country.
IN between mr.anil -give me wake up call what this morons doing.
Oh mama mia!!! Approximately RM 1 bil a month for the last 35 years ( till 03/08 ) What more evidence do we rakyat need!!! Time to move on before our children are made to beg in the streets ( don’t think too far stretch for our grandchildren )
Real shame the situation we’re in now, with all the resources at our doorsteps, we could only envy our neighbour S’pore ( who do not even have enough water to drink ) yet their GDI, standard of living and government is way above ours. Hey, goons, time to relinquish and payback time.( can you eat and live with conscience while the rakyat is left to rot!!!)
As long as Malaysia government has no transparency and the leaders has no accountability. We can, for the next 1000 years, forget about equal opportunity, forget about equal wealth distribution, forget about nation development … the list goes on where we can ask our 10 generations down the road (especially those that has no connection to BN) forget about having a good life and future. Even if one day we kick BN out from the government, are we able to recover what we have lost, are we able to put all these monsters and monkeys into jail. Even if we are able to charge them in the court and put them into jail, is it commensurate with the damage they have done for the past 50 years ….
Effective in its economy and clarity of words, this write up needs to be translated into Bahasa and shot off to any blog, publication that would host it Anil.
Effective in its economy and clarity of words, this write up needs to be translated into Bahasa and shot off to any blog, publication that would host it
…..and write the amount as 600,000 millions so that those of us who are not accountants can get the sum right. If we divide the spoil for all 26 million Malaysians living here, thats RM 23,077 for EVERY person….. thats RM 115,385 for EVERY family of 5. Now, just imagine for yourself…..
Petronas money is not BN’s money, and should not go to BN cronies! Petronas money is rakyat’s money, give it to the rakyat! Say NO to BN, Say YES to PAKATAN RAKYAT!
Lets wait for the dooms day for arrogant UMNO….
It so sad that a nation so blessed with such abundance is being (undermined) by thieves.I sincerely hope and pray that the PAKATAN RAKYAT will make good of whats gone bad.I have put my migration plans on hold.Being a third generation Malaysian Indian,why should i ever give up what my forefathers bleed and died for in building this nation and securing my rights as a citizen.
Anil
I was at the DAP Ceramah in SS2 just before 8 March, when Tony Pua highlighted that the price of oil was USD 25/barrel about 6 years ago, as compared to then over USD 100/barrel (and now USD 135/barrel). Tony made a very good point about the fact that the figures do not make sense given that whilst the price of petrol has skyrocketed at least by an additional 300%, Petronas only managed to report an increase in profit of 20% or so (if I remember Tony’s figures correctly).
I then realised that something is wrong somewhere, and I recalled how people have been talking about the Middle East countries, eg Dubai, booming and flourishing because of the oil price increases. Therefore, how is it that both Dubai and Malaysia being oil producing countries, that Dubai can boom and flourish, whilst Malaysia is still struggling re oil subsidies?
Let us take a very simple example: assuming that Petronas volume of production 6 years ago, and today is the same (say at 100,000,000 barrels per annum) and that the costs of production is the same (if not, say increased by 50%):
- Revenues 6 years ago: USD 25/barrel x 100,000,000 barrels pa = USD 2.5 billion pa
- Costs 6 years ago: say 70%, USD 1.25 billion pa
- Profit 6 years ago: USD 1.75 billion pa
- Revenues today: USD 135/barrel x 100,000,000 barrels pa = USD 13.5 billion
- Costs today: say 30% on Costs 6 years ago, ie USD 1.75 billion pa X 150% = USD 2.625 billion pa
- Profit today: USD 10.875 billion pa
- Increase in Profit: USD 10.875 billion - USD 1.75 billion = USD 9.125 billion pa
INDEED, WHERE HAS IT ALL GONE?
Jim
P/S: Indeed, a very simple example, but you get the picture.
You are absolutely right. The money could also be use to built hospitals and roads in East Malaysia.
power tends to corrupt and absolute power corrupts absolutely. It is therefore important that we, as citizen, must ensure that the ruling government is not too strong may it be BN or PR.
[...] The big question is, has the government made the best use of all that money? READ HERE [...]
As a saying goes, ” there will be liars and thieves so long as the people are ignorent”. 600 billions or whatever the people won’t be bothered.best joke is ………those guilty of this acts will be punished by the god.ignorent is bliss
All we can do is to leave it to God Almighty to deal with such blatant abuses if nobody can account for where all these petro-bucks have gone to. May the wrath of God and Karma come upon you!
Some of my friends suspected that our oil has been presold via forward contract to Japan some years ago at very cheap price. Perhaps someone from PR can ask about this at the next paliament sitting.
I am no fan of Dr. M but to be fair to him, he gave us Twin Towers, KLIA, Sepang Formula 1, Putrajaya, Penang Bridge, LRT, Proton, MSC - when the price of oil is between 11 to 28 per barrel. Sure there are lots of wastage but at least we have something. Now oil is >150 per barrel. After 5 years what have we got??????????
[...] Anil Netto asks where has the money gone [...]
Price of petrol up by 40%..electricity up by 18%..which is reasonable and inline with global prices BUT now that we have to change our lifestyles..cut costs etc>>shouldn’t the big crony or GLC companies owners,CEOs etc also try to do the same?
Penang Second Crossing at Rm 4.8b is 30% over priced
Double Tracking (Gemas to Padang Besar)at 16.5b is 25% over priced
Over priced means above and beyond “above average” construction margins of 12.5%. Thus ,just reviewing prices of these 2 projects will save us Rm 5 billion.
And how can the Rm 5 billion benefit Malaysians?The answer is simply by providing “competetively priced” mass transit projects.New Delhi Metro Phase 1 (65 km,13 underground station,12 km tunnels etc..and full complement rolling stock )cost only Rm 120m per km.Our Kl Monorail cost us Rm 130m/km (simple systems and limited rolling stocks)..and construction was over the same period.
Thus a combination of LRT,Monorails,trams…can be built at an avg cost of Rm 80m per km thus the Rm 5 billion can give us 60 km of mass transit ( 5 lines of 12 km each) with capacity of 100,000 persons per hour.
More ppl will benefit and will also spur economic activity.Nobody will lose money..still make some decent profits and seeing the happy rakyat shld stir some pride to the GLC,big crony Companies CEOs and Directors.
dream on…
Sure the past governments and current has squandered all our MONEY for their selfish deeds.Take a look at our neighbour Singapore , the ruling party may be tough but all intended measures and money are for the nation. The building of the nation…eg roads, public transport, universities, libraries…..Put the oil money back to the RAKYAT, for the RAKYAT…and the nation will prosper by itself and everyone will be wealthy together instead of a few ex-ministers and their cronies!!
Correct me if i am wrong, but doesn’t Petronas have debts totalling up to RM170b on its books also? This was also revealed some time ago in a question in Parliament.
Looks like the reinvestment figures doesn’t it? Or in other words, the so-called reinvestment figure pun dah kena cangkul? This is the article from 2004 in Malaysiakini. The debts are quite considerable.
Petronas posts record profit, outlook bullish
Jun 30, 04 4:06pm
National oil firm Petronas today said net profit for the financial year ending March 31, 2004 rose 56.6 percent to a record RM23.66 billion due to higher crude oil prices and operational improvements.
MCPX
President and chief executive officer Mohamad Hassan Marican said revenue was also at a record level, up 20 percent at RM97.51 billion from RM81.43 billion a year ago.
Of the revenue, Mohamad Hassan said 65 percent was from Petronas’ domestic operations while Africa and the rest of the world contributed 17.2 percent and 17.8 percent respectively.
He said group pretax profit grew 40 percent to RM37.44 billion, resulting in a 38.4 percent annual return on revenue compared with an average of below 15 percent among major oil firms.
The group’s return on capital employed for the year stood at 29.6 percent, he said.
Mohamad Hassan also said the group’s balance sheet continued to strengthen with total assets growing to RM203.21 billion from RM178.01 billion, an increase of 14 percent, while shareholders’ funds rose 25 percent to RM97.06 billion from RM78.36 billion.
But its cash and fund investment balance fell to RM53.79 billion from RM55.38 billion primarily due to the utilization of funds for asset acquisitions particularly the West Delta Deep Marine asset and Egyptian LNG (liquefied natural gas) project in Egypt, he said.
Borrowings fell to RM57.73 billion from RM58.09 billion mainly due to the repayment of US$500 million in notes.
Improving debt
Mohamad Hassan said the group’s total debt over assets ratio improved to 28.4 percent, which is within the group policy of keeping debt levels below 30 percent of total assets.
As for the outlook, Petronas chairman Azizan Zainul Abidin said: “We are optimistic and bullish as we have created new sources of income that will come onstream this year”.
Mohamad Hassan added that Petronas, being an integrated company, was partly cushioned from the volatility of oil prices.
Asked if Petronas had plans to raise its production capacity to cash in the prevailing oil prices, Mohamad Hassan said “we will be maintaining our production capacity”.
Petronas has operations in 34 countries. As at January, Petronas had total oil and gas reserves of 24.14 billion barrels of oil equivalent, of which 80 percent were domestic and the balance international. - AFP
Correct me if i am wrong, but doesn’t Petronas have debts totalling over RM100b on its books also? This was also revealed some time ago in a question in Parliament.
Looks like the reinvestment figures doesn’t it? Or in other words, the so-called reinvestment figure pun dah kena cangkul? This is the article from 2004 in Malaysiakini. The debts are quite considerable.
Petronas posts record profit, outlook bullish
Jun 30, 04 4:06pm
National oil firm Petronas today said net profit for the financial year ending March 31, 2004 rose 56.6 percent to a record RM23.66 billion due to higher crude oil prices and operational improvements.
MCPX
President and chief executive officer Mohamad Hassan Marican said revenue was also at a record level, up 20 percent at RM97.51 billion from RM81.43 billion a year ago.
Of the revenue, Mohamad Hassan said 65 percent was from Petronas’ domestic operations while Africa and the rest of the world contributed 17.2 percent and 17.8 percent respectively.
He said group pretax profit grew 40 percent to RM37.44 billion, resulting in a 38.4 percent annual return on revenue compared with an average of below 15 percent among major oil firms.
The group’s return on capital employed for the year stood at 29.6 percent, he said.
Mohamad Hassan also said the group’s balance sheet continued to strengthen with total assets growing to RM203.21 billion from RM178.01 billion, an increase of 14 percent, while shareholders’ funds rose 25 percent to RM97.06 billion from RM78.36 billion.
But its cash and fund investment balance fell to RM53.79 billion from RM55.38 billion primarily due to the utilization of funds for asset acquisitions particularly the West Delta Deep Marine asset and Egyptian LNG (liquefied natural gas) project in Egypt, he said.
Borrowings fell to RM57.73 billion from RM58.09 billion mainly due to the repayment of US$500 million in notes.
Improving debt
Mohamad Hassan said the group’s total debt over assets ratio improved to 28.4 percent, which is within the group policy of keeping debt levels below 30 percent of total assets.
As for the outlook, Petronas chairman Azizan Zainul Abidin said: “We are optimistic and bullish as we have created new sources of income that will come onstream this year”.
Mohamad Hassan added that Petronas, being an integrated company, was partly cushioned from the volatility of oil prices.
Asked if Petronas had plans to raise its production capacity to cash in the prevailing oil prices, Mohamad Hassan said “we will be maintaining our production capacity”.
Petronas has operations in 34 countries. As at January, Petronas had total oil and gas reserves of 24.14 billion barrels of oil equivalent, of which 80 percent were domestic and the balance international. - AFP
[...] Petronas’ RM600 billion profits where has it all gone [...]
“Think of the billions spent on bailing out banks. And remember the colossal sums spent on building Putrajaya, building the Twin Towers, hosting the Malaysian Grand Prix, sponsoring the Petronas racing teams and setting up the Malaysian Philharmonic Orchestra.”
… Don’t forget also, the Submarines, the space tourist programme, the Russian MIG …
this is really hopeless,who can help us?
In this fast changing world, in this energy hungry world.
In this wealth seeking world, in this power seeking world.
Learn to be thrifty, learn to manage your cash flow.
Learn to balance your asset, debt and liquidity.
Learn to networks and earn money every minutes, every hours.
Learn to read, see, hear and think. Learn to make proper judgement.
Whatever people said, whatever angers , whatever they did….
They find ways to hide, to defend with the enormous wealth .
We must find our wealth, build our wealth in the difficult time.
Many stories told repeatedly, will you get confused and tired.
Learn to live in the world , more challenging ahead.
TO ALMOST ALL YBS’ OF SABAH AND ALMOST ALL SABAHAN MALAYSIAN LEADERS THIS PETRONAS’REVELATION MAKE U GUYS STERLING COWARDS IF YOU WILL JUST DANCE TO SAME NUMBER OF STEPS 1-2-3 N 5% 4U N 1-2-3 N ALL 4ME.
MAKE A MOVE YOU HAVE THE BALL ON OUR SIDE. ITS HIGH TIME TO DEMAND WHAT IS LEGALLY FAIR FOR THE SABAHAN MALAYSIANS. I REFUSE TO ACCEPT THAT ALL OF YOU ARE PERFECT SAMPLES OF LIVING ANESTHESIA.WE HAVE THE PARLIAMENT, STAND STRONG AND ASK! UNTIL IT SHALL BE GIVEN.SEEK! AND YOU WILL FIND THE STRENGHT. KNOCK ! AND THE DOOR WILL BE OPEN .
NOW THAT WE KNOW HOW MUCH PETRONAS IS MAKING FROM HOW MUCH PETRONAS IS GIVING US SABAHANS - MAKES US VERY VERY SAD. WE ARE THE WORLD AND STILL WE ARE THE POOREST STATE. NOW THIS IS VERY VERY HUMILIATING TO MOST OF OUR YBS WHO STILL MAINTAIN THAT ZIPPER IN THEIR MOUTH. WHATEVER DIVERSION YOU DO TO MAKE YOU ALL LOOK STARING TO YOUR PEOPLE BUT KEEP YOUR SILENCE ON THIS MATTER YOU ALL ARE WORST THAN A BREATHING PIN HEAD.
SO SAD VERY SAD…..
Dear Anil
I refer to your article above and allow me to quote “Look how much has been wasted and squandered over the years. Think of all the natural gas subsidies dished out by Petronas to the Independent Power Producers (private electricity companies), which have been raking in billions in profits over the years.”
Your claim that Petronas subsidises IPPs is incorrect and this is based on legal facts (PPAs) and therefore verifiable. For your information, electricity tariff comprises of the following components:
(a) Cost of fuel which is gas.
(b) Cost of the planting up of power plants which runs into billion of ringgit forked out by IPPs including TNB
(c) Cost of maintenance of the plant during the operating period.
Note that the fuel cost component has a “pass-through mechanism” from PETRONAS-to-IPPs-to-TNB and eventually to the end users. With this pass-through mechanism, whatever the price of gas Petronas “sells” to IPPs, the IPPs do not derive any commercial benefits in it because the IPPs will then “sell” back this fuel cost component (in every unit of electricty) to TNB at at the same price Petronas sold to IPPs. So even if the price of gas is FREE or RM35/mmbtu, the IPPs do not make any money from it. It is not the case where IPPs mark-up or put-in a profit margin on the cost of gas.
However, IPPs under the PPA, are required a to adhere to a certain level of performance output to ensure that the gas is used efficiently and not wasted.
The reasons for the pass-through mechanism are obvious:
a) The electricity industry in Malaysia has only a single seller of fuel (petronas) and single buyer of electricity (tnb).
b) fuel cost accounts approximately 70% of the electricity tariff;
c) the unit price of electricity that IPPs sell to TNB (which is the single buyer) is based on a fixed price over a fixed period of time;
d) no investors and no banks will finance an IPP (whether built by TNB as in the case Janamanjung or the private sector) if the ‘pass-through’ mechanism is not present.
Therefore, the fuel cost component of of producing a unit of electricity is passed through to TNB who then passes it down to the end user via tariff adjustment. If the fuel price reduces, the end users should benefit from it and if the fuel price increases, the end user end up paying a higher tariff.
Therefore, in essence , Petronas (and the Government ) subsidise the power sector (and not TNB or IPPs ) to ensure low electricity tariff. To reiterate, the IPPs derive no commercial benefit from the gas pricing as set by Petronas and the Government.
To strengthen the structural “weaknesses” of the electricity sector, I suggest that the government should consider the following options:
The first option is to liberalise the market and introduce competition among generators (both IPPs and TNB), say, through an electricity pool.
The second option is for the government to buy over all the IPPs and nationalise the whole sector for good.
Until then, I do not see a light in the tunnel.
Dear Anil, to answer where has the money goes is like asking where does the govt gets the money to builds all the things that Malaysia have since 1974 till today (since PETRONAS starts paying dividends, taxes and royalty from day 1). Also for you and others to insinuate that they money has been grossly misspent is equally not right. I have no answers as well. From my observation, Malaysia and its population had a good going so far. Our people has been living the luxury live through our government grants, subsidy, scholarship etc. We have 1st world infrastructures which everyone had agreed.
Only after 4th June when the subsidy was taken away, we complaint about the hardships i.e. no more overseas trips, cheap electricity, cheap water, etc. What I don’t understand is we can drive or travel in Europe where the cost is high but we never think that the global impact is going to hit home. Even in Singapore the cost of living there is high and yet not one of us bat an eyelid.
At the end of it, you have punished the govt through political tsunami. Let the new elected govt delivers their promises. Let them show that they can do much better than BN or UMNO or whomever the ruling party is. I want to know for each RM1 taxes that I pay how is PKR is going to do better?
[...] RM600 billion profit Posted on June 30, 2008 by oilmonitormalaysia Petronas’ RM600 billion profit: Where has it all gone? by Anil [...]
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