Indonesia’s President, Joko Widodo, during his state visit to Malaysia in August had mooted the idea for cooperation or a merger between the state oil companies, Petronas and Pertamina in efforts to expand their businesses together.
The President said Petronas and Pertamina could collaborate or be merged as one to become a large enterprise with more capacity, capital and equity. The two enterprises, I think, are already like sisters. We can expand together to other countries, we can look for oil together, we can export downstream products to other countries, Jokowi said during his state visit to Malaysia in early August where he met prime minister, Tun Dr Mahathir Mohamad.
Now, the Sabah chief minister Shafie Apdal takes a trip to the Pertamina Refinery Unit in Balikpapan, Indonesia and utters the same message that President Jokowi had said about collaboration between Pertamina and Petronas.
Doesn’t the chief minister have anything new to say apart from plagiarising President Jokowi’s idea? The only difference in Shafie’s statement is including ‘Sabah’, as a potential beneficiary.
Shafie says, “we need to play our part to manage our resources well, but we cannot work alone. We should collaborate with main players.”
What does Shafie have to collaborate with the main players? How can a bilateral arrangement, if any, between two nations’ state companies like PETRONAS and PERTAMINA even consider including Sabah in the business tie-up?
What value can Shafie bring to the table, apart from his forward-looking statements? Is he looking at the failed exploration and production (E&P) company, Sabah International Petroleum Sdn Bhd (SIP)?
Despite being in the ‘lucrative’ oil and gas business, SIP is not performing. According to sources, the beleaguered company is in debt and was expected to settle (its debts) this year but the repayment to the Sabah Development Bank has now been scheduled for next year.
For an E&P company, this is an indicator of weak performance, lack of expertise, and lack of profound growth opportunities, moving forward. The oil and gas fraternity would probably scoff at a tie-up involving SIP due to mismatch. Incidentally, SIP’s chairman is Shafie Apdal and the company is owned by Sabah Development Bhd.
SIP needs a complete revamp of its business strategies and operations. Due diligence ought to be conducted to identify shortcomings, provide resolutions and determine its new way forward in this fast evolving oil & gas landscape – before even considering tie-ups of any sort!
If Shafie were an astute chief minister, he would already be restructuring all state-owned assets, including SIP. After 17 months as chief minister, he is still playing ‘wayang kulit,’ and literally has nothing to show for.
If a comparison were made between Shafie Apdal and any of the previous chief ministers’ achievements, it won’t be surprising to see Shafie Apdal trailing at the tail-end!