Use Oil Price Windfall To Support Local Firms Petronas Urged

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With global oil prices at more than US$120 a barrel, Petronas has been urged to give local firms greater support.PETALING JAYA: An economist has called on Petronas to provide support to Malaysian oil and gas companies, saying global oil prices allow the company to be more liberal with its spending.
Two trade groups are reported to have recently complained that the national oil company is raking in billions at the expense of oil and gas companies’ margins.
The two groups, the Malaysia Oil and Gas Services Council and the Malaysia OSV Association, have written to Petronas on the matter, the Edge reported.
“Petronas must be more supportive of these companies especially since it is enjoying huge profits,” said Barjoyai Bardai, an economist and finance expert with Universiti Tun Abdul Razak.
Barjoyai Bardai.“I can understand why Petronas may want to be more ‘business oriented’ than usual, given the fact that they have had to pay larger dividends to Putrajaya in recent years, especially following the abolition of the goods and services tax,” he told FMT.
Petronas is reported to have made RM48.6 billion in profits after tax in 2021, on revenues of RM248 billion.
Global oil prices breached the US$120 per barrel mark last month.
Barjoyai said Petronas should take over ailing Sapura Energy Bhd, to protect it from bankruptcy, as proposed by some, including former prime minister Najib Razak.
Petronas has previously denied holding any discussions with the government on taking over the company.
Barjoyai said Petronas should not see a takeover as a burden but as an opportunity to expand.
“Sapura has many capabilities in the industry. It’s a unique company. Yes, they currently have debts but Sapura has the capability to turn things around,” he said.
Sapura Energy announced a loss of RM8.9 billion last year and is facing cash flow problems following a loss of revenue during the pandemic.
FMT has contacted the MOGSC and Malaysia OSV Association for comment.- FMT

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