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?
Loading ...
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 [...]
[...] Read Also Read Zorro-unmasked – ADEL HAKIM SAYS OTHERS MORE DESERVING KIDS DESERVE SCHOLARSHIP. AnilNetto – Petronas’ RM600 billion profit: Where has it all gone? StockTube – Smart people become Jokers after joining BN, how come? MalaysiaKini – ‘Chor, [...]
[...] Read Also Read Zorro-unmasked – ADEL HAKIM SAYS OTHERS MORE DESERVING KIDS DESERVE SCHOLARSHIP. AnilNetto – Petronas’ RM600 billion profit: Where has it all gone? StockTube – Smart people become Jokers after joining BN, how come? MalaysiaKini – ‘Chor, [...]