Datuk Seri Najib Tun Razak. Bernama file photo
KUCHING: Former Prime Minister Datuk Seri Najib Tun Razak has called on the new government to continue to give sufficient space and capital to Petronas to continue to fulfil its vision and not to loot its funds or for ‘bail-outs’ mission like what was done during the 22 years of Tun Dr Mahathir Mohamad’s previous administration.
Najib, in his Facebook posting this afternoon, noted that the Pakatan Harapan (PH) government recently stated that the short fall in revenue due to the abolition of goods and services tax would be made up by asking Petronas, Khazanah Nasional and Bank Negara Malaysia to pay higher dividends to the government.
“However, this approach is not sustainable and would sacrifice long term just for short-term financing,” he said.
In noting that Petronas’ cash reserve had increase to RM164.7 billion as of end of March 2018, an increase of RM36.5 billion compared to RM128.2 billion at the end of 2017, Najib said the increase was due to the competitive price of oil besides payment received from Aramco Saudi’s investment for Rapid Pengerang project.
“Petronas’ cash reserve now is far higher compared to 2008 when I started my duty as a finance minister.”
During his administration, Najib said he was very careful in ensuring that Petronas did not have to pay dividends to the government beyond its requirements because he wanted to ensure there was adequate cash balance to meet Petronas’ expansion plans in key and downstream business sectors to become a world-class integrated energy company.
As a result, he said Petronas’s cash balance had significantly increased and the company was able to invest and expand to implement game changer projects such as the Rapid Pengerang Project, Sarawak Oil and Gas Integration Project (SSIOGP) and the Sabah Ambon and Urea (Samur) project.
“At that time, Petronas was also given the freedom to invest in major upstream projects in Malaysia and everywhere in the world such as Canada, Iraq and Brunei. These investments would be able to generate high dividends for Petronas and Malaysia in the long term. We invest to ensure benefits for the long term.”
In noting that Petronas’ profit also depended on world oil and gas prices that are beyond its control, Najib said excessive dependence on high oil prices should be avoided.
“While the world oil prices are now quite high compared to the expectations in my 2018 budget, we have to be cautious in case the oil prices drop further like the 80 per cent fall that took place in 2014 and 2015.”