Wednesday, 1 March 2017

Si pendengki dan si tolol

Aramco is not buying Petronas as some suggested.

What Aramco is buying for RM31 billion is 50% in RAPID’s refinery and cracker projects only - which are just a portion of the massive Pengerang Intergated Complex.

These projects that Aramco is investing in are not completed yet but should be ready in 2019.

Under the partnership, Saudi Aramco will supply up to 70% of the crude feedstock requirements of the RAPID’s refinery, while natural gas, power and other utilities would be supplied by Petronas.   

Such investments are not unique to Aramco as they have done the same investments in refineries throughout the world so that they can supply their crude oil to the refineries.

Petronas also benefits from this assured crude oil supply as Malaysia is not a big crude oil producer.

The Pengerang project has many advantages over our close neighbour down south - especially in terms of land and capacity.

Although Singapore got its start with the oil facilities left behind by the massive investments in the Naval base of the British before they left, it is inexcusable why we had allowed Singapore to be the oil trading and processing hub of Asia for so many decades even until today - despite the fact that we produce our own oil and gas while they had none.

Singapore is dubbed "the undisputed oil hub in Asia", with the country's oil industry responsible for 5% of its GDP or about RM60 billion per year.

This also allowed Singapore to attract petro-chemical and related industries and manufacturers to locate there.

Instead of building mega-projects such as crooked bridge or Sepang etc, taking over Singapore's oil crown should have been Malaysia's number one priority due to the massive amounts of revenue, profits, jobs and follow-on industries that follows with it.

With RAPID, this will soon change.

For time in decades Malaysia will soon be a net exporter of refined oil products instead of a net importer allowing others to profit at our expense.

Refining is actually more profitable when oil prices are low. While there is greater business for oil storage in times of low oil prices and supply gluts.

This allows our country and Petronas to be better balanced and more resilient to the ups and downs of oil prices.

Yet another mistake of the past solved.

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