Aku DAN Minyak

This is what i talked about during my 3rd Toastmaster Speech in MCOBA building on Tuesday. Something very close to my heart.
---


To celebrate our anniversary, I asked my boyfriend to take me out to some place expensive. We drove around, and he made a quick stop in SHELL (mind me) and turn to me and said. “Sayang, this is the most expensive place I know”.
(Bam..) Well, of course he was just kidding around but this onviously is the impact of RM 1.92 vs RM 2.70

Oil price has made a shocking increase from the usual USD 30 to a startling USD 130 within this last 5 years. In it’s heavily consequence of subsidizing the masses, the government made a bold decision last month to increase the petrol from RM 1.92 to RM 2.70. Some says that the reaction by the government shows apathy to the suffering of its people.

Let me try to educate you how the RM 2.70 came about?
Fuel price in Malaysia is controlled by the government using a formula under the automatic pricing mechanism introduced in 1974.
The calculation is made based on the actual cost of petrol or diesel, the operating costs, margin for dealers, margin for retail oil companies and the balancing number of duty or subsidy.

This is how it is calculated:
Product Cost : RM2.7637
Marketing Cost : RM0.0692 (fixed)
Distribution Cost : RM0.0262 (fixed)
Dealers' Commission : RM0.0950 (fixed)
Companies' profit : RM0.05 (fixed)
Duty or subsidy : (RM0.30)
Total Pump Price = RM2.7041

So you see, no retail oil company or dealer makes money from the hike of fuel prices. Oil companies pay for the product at market prices, but have to sell low, so the government reimburses the difference, hence subsidy. So, let me try to spell this out clearly to you, we (PETRONAS) have NOTHING to do with the fuel hike.

In fact, we do not even earn as high in the increasing oil price scenario. Exxon Mobil who preached about being the top of the Big Four Company in world earns USD 40 Bil in 2007, just USD 1 Bil higher than the year before due to the increase in price in producing 1 barrel of oil, as any other Oil & Gas majors in the world including PETRONAS.

Friends, We realize the fact that as PETRONAS was set up in 1974 with the seed capital of RM 10 Million by the government, we are obliged to generate income and value back to its shareholder, which is the government. Hence, after 34 years of hard earned work by the people who are loyal to serving the nation, we can boast on our 2007 Year End Financial Statement of RM 570 Billion in accumulated profit in which last year, we proudly sit on No 121 in terms of revenue of the Fortune 500.

Some critics have the misconception that we had it easy just because we are an Oil & Gas company, but do you know that not all National Oil Company (NOC) stand as tall as us? There come about a perverse fact that PETRONAS Carigali, the arms of the Exploration & Production for PETRONAS is duly given the right to explore and produce the blocks in Malaysia just because we are a linked to a government entity. This statement is very misleading as much as it is not true.

As an operator in this country, PETRONAS Carigali has the same rightful ownership to the entire Oil & Gas field in Malaysia as other operators such as Shell, Newfield or even ConocoPhillips in its quest to bid for the national interest. In fact, most blocks offshore Sabah & Sarawak are operated by the other operators like the famous deepwater Kikeh by Murphy Oil or even the Shell’s MLNG. However, I do have to admit that having an Oil & Gas reserve on our very own backyard does have its perks on gaining the capability advantage.

PETRONAS is perhaps a National Oil Entity, for now. 20 years down the road, it might transform itself into an International Oil Company, where in the depleting Oil & Gas scenario in Malaysia at present, we will see the company aggressively venturing out to the International arena. Then it would be a question of whether the 65% of profit going back to the government is justifiable. It would be the sort of birthright that we dare not question.

I admire my bosses who have spent 20 or even 30 odd years serving the company, and indirectly the nation. These are the loyalist who could have resigned and work elsewhere and easily earning triple or quadruple the salary they are enjoying now.

Statistic which was released sometime in late 2007 made a comparison between the earnings of Oil & Gas technical expertise in different part of the world. No surprise there that the earnings of the locals in Asia Pacific are the lowest, in which the expatriate working here are earning 4 times higher than the same locals who has the same years of experience. You would see this scenario everywhere, regardless of which nationals they are from.

This, ladies and gentleman, is the sole reason why PETRONAS staffs migrate to other companies, especially in Middle East. Two years ago, the whole section of technician in MLNG of about 40 staff resigned and works in Middle East, and a lot of other pursuit by other individual soon followed. A colleague of mine who has worked for 6 years was offered a USD 10K salary plus benefit to migrate and work in the Middle East. At this critical point where there are lack of expert in the Oil & Gas field and the eagerness of other companies racing to offer better compensation, some of my collegue who merely work for 2 years even migrated to other service providers and consultant offices which are offering … a lot more.

Nowadays, the 30 something thousand of PETRONAS staff are mostly juniors. In my division of about 1,200 staff, 50% of them are junior staff with experience of less than 5 years. Can you imagine the struggle that PETRONAS has to accomplish in trying to excite the staff to continue being loyal to the national’s agenda?

So, it is not that PETRONAS boast about being a loyalist by being underpaid and serving the nation undividedly, but we are. Take our bonus away, take our other benefit, scrutinize our every movement and decision, and you take away those loyal ‘government’ servant who wants nothing more than loyally serving the nation.

So please hear us out. If you can’t support us, join us and then you see. Thank you.