NADA February 2008

PP2986/02/2008 vol.1/08
Engen Soldiers
on in Sub-Saharan
Africa with SRDC
Acquisition
A Stellar Performance
Th e Merdeka Award
2
Nada PETRONAS
IN THIS ISSUE OF NADA
FOCUS
ENGEN SOLDIERS ON IN SUBSAHARAN AFRICA
WITH SRDC ACQUISITION
4
With representation in 14 African countries including Botswana, Ghana,
Kenya, Mozambique, Namibia, Swaziland and Zambia, future prospects
remain bright in the African continent for Engen.
ELNG: PARTNERING FOR MUTUAL BENEFIT
6
Initially conceived as a strategic energy project to meet the gas requirements
of Egypt and the Atlantic Basin markets, Egyptian LNG is testimony of the
successful partnering and commitment of various parties for the sustainable
development of the Egyptian LNG sector.
AOGC PONDERS A SHARED FUTURE
8
While demand for energy resources looks set to continue on an upward
trend, the energy industry must first get its act together to prepare for
that future scenario.
INDUSTRY
SUSTAINING LNG BUSINESS THROUGH
PARTNERSHIP
10
Flexibility and long-term mutual benefits are key to expansion of
the LNG industry.
A STELLAR PERFORMANCE
12
PETRONAS Group’s continuous emphasis on operational efficiency
and reliability results in a much improved financial showing.
INNOVATION
THE ENGINE THAT COULD
14
Engine development initiative by Research and Technology Division
promises to be a strong catalyst for technology competency development
and increasing the scope of PETRONAS’ offerings.
CORPORATE ROUNDUP
PETRONAS AROUND THE WORLD
16
PETRONAS Carigali breaks new ground in Turkmenistan.
MERDEKA SPECIALS
CELEBRATING 50 YEARS OF HARMONY
Your Say....
We want your feedback on what you want to see in future Nada issues. We also
welcome your views on stories featured in the current issue. To share your opinions
or contribute articles, please write to:
The Editor
Nada PETRONAS
Corporate Communications Department
Level 70, Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Centre, 50080 Kuala Lumpur, Malaysia
20
Cover rationale:
Redza Piyadasa’s work reminds us of the historical background
of present-day Malaysia’s social make-up; multi-cultural realities;
migration and cultural assimilation; tradition and heritage;
political and social history. The artist’s metaphorical visual
commentaries remind us of Malaysia’s multi-cultural roots and
its rich cultural past conveyed by his Malaysian Series exhibition
that was held in conjunction with Malaysia’s 50th anniversary
of independence at GALERI PETRONAS. The piece entitled
‘Malaysian Story No. 2’ is reproduced here courtesy of Datuk and
Datin Charan Dass Sharma.
Nada PETRONAS is the corporate newsletter of the PETRONAS
Group of Companies published quarterly by the Corporate
Communications Department of the Legal and Corporate
Affairs Division. Opinions expressed in the newsletter do not
necessarily reflect the official views of PETRONAS and its Group
of Companies.
Layout design by:
Creative Section, Corporate Communications Department
Printed by:
Cetakrapi Sdn Bhd
Nada PETRONAS
Our Journey
Continues
BOUND by Malaysia’s shared
legacy, PETRONAS presses
on in the journey to become a
Global Champion.
IN this edition of Nada, we feature PETRONAS
subsidiary Engen Ltd, where its Chief Executive
Officer (CEO) shares the company’s future prospects
and opportunities for growth in the African continent
in line with Engen’s African aspirations. Also included
is Engen’s progress in three focus areas in its EPIC
2016 vision, namely retaining its market share in
South Africa, expanding its capabilities in the subSaharan Africa market and improving refining as well
as trading performances.
Then, ponder on key messages from the 12th Asia
Oil and Gas Conference that feature opinions and
ideas by leaders of oil corporations, government
officials, consumers and industry experts on a variety
of pertinent issues affecting the oil and gas industry
today. These include high oil prices as well as
concerns over energy security and climate change.
On the industry front, read about PETRONAS’
involvement and success story in Egypt’s Liquefied
Natural Gas (LNG) sector, and how this partnership
of mutual benefit for Egypt and PETRONAS has been
an enriching experience. Also read about sustaining
the LNG business through partnership, as shared by
PETRONAS President and CEO Tan Sri Dato Sri Mohd
Hassan Marican in his keynote address at the LNG15
conference held in Barcelona, Spain.
Nada also highlights PETRONAS’ healthy growth
and record profits for financial year ended 31 March
2007, thanks to higher contributions from overseas
operations and strong global demand for oil.
On the innovation front, read about PETRONAS’
K200 go-kart engine development, which is part of
the company’s efforts in technology innovations
aimed at addressing environmental concerns such as
carbon emissions and climate change, among others.
Then, read how PETRONAS’ was named as one
of ‘The New Seven Sisters’, a group of increasingly
influential oil and gas companies from countries
outside the Organisation for Economic Cooperation
and Development (OECD), marking a change in the
global oil and gas sector.
Capping off this issue are the Merdeka Specials,
featuring various programmes and activities that
celebrate the values that have guided and inspired all
Malaysians on our journey as a nation throughout 50
years of independence. They include the prestigious
Merdeka Award introduced in conjunction with
Malaysia’s 50th Merdeka anniversary.
We thank all those involved in making this edition
a special one.
Nada Editorial Team
3
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Nada PETRONAS
FOCUS
ENGEN SOLDIERS ON
IN SUBSAHARAN AFRICA
WITH SRDC ACQUISITION
With representation in 14 African countries including Botswana, Ghana,
Kenya, Mozambique, Namibia, Swaziland and Zambia, future prospects
remain bright in the African continent for Engen.
W
ith a 23.7 per cent market share of South Africa’s fuel
market, Engen’s wholly-owned operating company
Engen Petroleum Ltd is clearly among the industry’s
forerunner. Its core business includes crude oil refining,
marketing of its primary refined petroleum products and the
provision of convenience services through its retail network
of over 1,230 service
stations and more
than 530 Quickshops
and Convenience
Centres in South
Africa.
Engen is 20
per cent owned by
Worldwide African
Investment Holdings
(Pty) Ltd, the only
South African blackcontrolled and
managed company
focusing exclusively
on the broader energy
sector in sub-Saharan
Africa.
On 30 May 2007,
Engen announced that Engen Petroleum agreed to acquire a
60 per cent stake in Shell Republique Democratique de Congo
(SRDC) and Royal Dutch Shell PLC’s petroleum business in the
Democratic Republic of Congo (DRC).
Looking ahead, Mohd Rashid Mohd Yusof, Managing
Director and Chief Executive Officer of Engen, says the future
prospects for the company remain bright in the continent.
There is much scope for growth, he tells Nada in a recent
interview.
What are Engen’s African aspirations?
We aim to significantly grow the size of our business beyond
South African borders and across sub-Saharan Africa. The goal
is to move the business from our current fourth position in subSaharan Africa behind Total, Shell and Chevron to the number
one or number two position. Currently, we have a presence
in 14 countries, with significant market share in a number of
these countries, and we are in the number one position in South
Africa.
What are Engen’s medium- and long-term plans to further
advance such aspirations?
Engen’s plans for both the medium- and long-term are to grow by
acquisition as well as organically. On the acquisition landscape,
we are positioning ourselves to take advantage of the changing
Nada PETRONAS
strategies of some multinationals. Nigeria is a major market in
Africa and we intend to be a player there. Other focus areas are in
East Africa but we will also pursue good opportunities wherever
they may arise in sub-Saharan Africa.
How has Engen fared in Africa over the years? What are
the factors that have enabled Engen to achieve some of
these things?
We have had a challenging history. Africa is a difficult business
environment and there have been setbacks in the past. We
have the benefit of a resilient, dedicated team of people who
are conversant with doing business in sub-Saharan Africa. We
also leverage on our expertise gained from our South African
operations, as well as the Engen value system which holds the
company to a common set of values and aspirations. We have
steadily grown the size and profitability of the business over
the years by taking advantage of growth opportunities as they
arise.
Engen introduced the EPIC 2016 vision in 2006. What
progress has been made in the three focus areas
identified by Engen under the vision, namely retaining
its market share in South Africa, expanding capabilities
in the sub-Saharan Africa market and improving refining,
manufacturing and trading performances?
We are the number one market leader in South Africa, and we
aim to defend that position and market share vigorously, while
remaining innovative in our service offerings. For expansion in
sub-Saharan Africa, we have done a comprehensive review on
the strategic markets and supply infrastructure, and we have
identified the target markets and countries. The SRDC deal is one
example and we are making bids in other countries. The refinery
has put in place its plans to improve operational excellence
through various initiatives – PIP (Profit Improvement Plan), GEMS
(Global Energy Management System) and GRS (Global Reliability
System). These initiatives are now moving forward using the
Operating Performance Improvement (OPI) methodology which
has been implemented successfully in PETRONAS.
What prompted Engen’s purchase of the 60 per cent stake
in SRDC?
DRC is a significant market in Africa and we see it as an important
match for us. Shell’s decision to sell its interests in SRDC is a good
business opportunity for us and has enormous synergy with
our joint venture with Total in SRDC. This deal is an important
strategic step in expanding our investments in SRDC and will be a
good stepping stone for our growth across sub-Saharan Africa.
What is the SRDC deal about? How would the latest deal
help in advancing Engen’s African aspirations?
SRDC is jointly owned by the Royal Dutch Shell Group (60 per cent)
and the government of DRC (40 per cent). It is headquartered in
Kinshasa and operates 26 retail sites. It also supplies fuel to six
airports, two lubricant depots and has about 40 commercial
customers, with combined sales in the region of 162.7 million
litres for the financial year ended 30 June 2005. Most of the
volume sold by SRDC is stored and delivered using the shared
petroleum distributor SEP Congo. The deal is certainly not just
about building a portfolio of new businesses. It is also about how
well they fit together with our existing businesses. We will examine
the synergies of our operations, together with those opportunities
that exist in West Africa, East Africa and Nigeria, as we strive to
build market share across sub-Saharan Africa.
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Nada PETRONAS
FOCUS
ELNG: PARTNERING
FOR MUTUAL BENEFIT
Initially conceived as a strategic energy project to meet the gas
requirements of Egypt and the Atlantic Basin markets, Egyptian
LNG is testimony not only of commercial success but of the
successful partnering and commitment of various parties for
the sustainable development of the Egyptian LNG sector.
Nada PETRONAS
P
ETRONAS’ foray into Egypt began in 2001 when it
signed its first farm-in agreement with Royal Dutch
Shell plc to explore and develop gas fields in the North
East Mediterranean Deepwater (NEMED) concession area.
PETRONAS took a 16 per cent stake in the concession, while
Shell, as the operator, held the remaining 84 per cent in the
ultra deepwater block.
But the breakthrough came two years later, when PETRONAS
acquired a 35.5 per cent interest in the Egyptian LNG (ELNG)
Project at Idku, and a 50 per cent working interest and joint
operatorship of the West Delta Deep Marine (WDDM) concession
block offshore Egypt from Edison SpA of Italy. The other partners
in the ELNG joint venture (JV) included British Gas, Egyptian
General Petroleum Corporation, Egyptian Natural Gas Holding
Company and Gaz de France.
Subsequently, in July 2005, PETRONAS inked a cooperation
agreement with Tharwa Petroleum Company of Egypt to create
and add value to the oil and gas resources in and outside Egypt,
and to help develop the human resource capability of its Egyptian
partner.
From the onset, PETRONAS and its JV partners knew that a
strategic and mutually beneficial partnership was the key to
creating value from Egypt’s rich gas resources, while sustaining
the ELNG Project at Idku on a long-term basis.
This has proven to be true. Today, ELNG is Egypt’s largest
LNG partnership. It has successfully built a capacity of 7.2 million
tonnes per annum and a two-train gas liquefaction plant that
has brought in nearly USD2 billion of foreign investment into the
Egyptian economy.
In terms of export capacity, Egypt currently ranks as the
world’s eighth largest LNG exporter.
The LNG industry is projected to provide export revenue for
at least 20 years, creating long-term job opportunities. At the
same time, it has led to the transfer of technology and technical
expertise that will go a long way in supporting the strong
development of Egypt’s petroleum industry in particular and its
national economy in general.
For PETRONAS, the ELNG Project provides an important
international source of LNG that has positioned it to establish a
foothold in the Atlantic basin market.
Chief Executive Officer of ELNG Adnan Zainal Abidin says
ELNG is significant at many levels, not least because it represents
the largest project financing arrangement in Egypt and is the
single largest investment made by PETRONAS outside Malaysia
that integrates the upstream, downstream and marketing
activities of LNG.
PETRONAS’ involvement in the ELNG Project has been an
enriching experience, Adnan adds. “PETRONAS has learnt project
execution strategies that can be replicated in new projects
to ensure shorter project schedule and minimisation of cost,
for instance. We have also learnt about project financing with
its associated intricacies when it comes to a consortium of
banks and multiple parties, from consultants and lawyers to
shareholders and government.”
Equally valuable is ConocoPhillips’ licensed LNG technology
employed at the ELNG facility. “It is different from the process
developed by Air Products & Chemicals Inc at our Malaysia LNG
plants (in Bintulu, Sarawak) and it has proven to be a simple
and robust design that eases construction work and is easy to
operate,” Adnan explains.
ELNG has been awarded the ISO 9001:2000 accreditation
company-wide and Idku Port has been awarded ISO 9000
certification, the first specialised port in Egypt to achieve this.
With five partners in the joint venture, decision making in
ELNG is being done by consensus among all the partners. As
Adnan says, “The percentage of the equity stake (35.5 per cent
in the case of PETRONAS) does not make any difference in how
the company is managed, as decisions have to be based on
unanimous agreement of all parties. Managing and engaging all
partners at all levels is important. A lot of off-site engagement has
to be carried out to understand various viewpoints and concerns,
so that issues can be addressed and taken into account before
decisions are made.”
What are PETRONAS’ plans for the ELNG Project in the
foreseeable future? According to Adnan, as PETRONAS has
interests in upstream blocks under exploration, if there are
significant gas finds, the realisation of other trains will strengthen
the Group’s position in the LNG business. ELNG has been designed
to accommodate another four LNG trains, he points out.
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Nada PETRONAS
FOCUS
AOGC PONDERS
A SHARED FUTURE
While demand for energy resources
looks set to continue on an upward
trend, the energy industry must get
its act together to prepare for that
future scenario, participants at the
12th Asia Oil and Gas Conference
(AOGC) were advised.
W
idely recognised as the premier platform for
networking and exchange of ideas within the
Asia-Pacific oil and gas fraternity, the annual event
was organised by PETRONAS in Kuala Lumpur from 10 - 12
June 2007. It was attended by more than 1,000 leaders and
representatives of oil and gas corporations, government
officials, traders, suppliers, consumers and industry experts
to discuss and evaluate the prospects and challenges in the
industry.
Citing figures from the International Energy Agency,
James Mulva, Chairman and Chief Executive Officer (CEO) of
ConocoPhillips, projects the world will require 40 per cent
more oil – or 120 million barrels per day – and 66 per cent
more natural gas by 2030. Driving this demand growth is
strong world economic expansion, especially in the AsiaPacific region.
However, high demand growth may not be sustainable
due to several factors, one of them being rising awareness
of environmental consequences, such as carbon dioxide
emissions, Mulva cautions.
Additionally, to meet new demand, the industry will have
to replace well over 100 per cent of its current production,
translating into 105 million barrels a day of new production
by 2030. This will require massive investments amounting to
USD20 trillion, Mulva says.
But a number of obstacles may jeopardise these new
investments. Some governments may decide to hike energy
taxes or channel revenues from their national oil companies
(NOCs) to meet social needs, draining the oil companies of
the money needed for capital investments.
Another issue is that only seven per cent of the world’s
oil and gas resources are fully available to international
oil companies (IOCs) for exploration and development.
Partnerships with NOCs enable IOCs to gain access to
another one-quarter. That leaves two-thirds of the world’s
resources out of reach of the IOCs, Mulva notes. In cases
where IOCs are granted new licences, they are for the more
challenging areas such as deepwater fields, where complex
geology or remote locations typically drive up exploration
costs.
Additionally, inflation in the cost of industry equipment
and services stretches delivery time by a few years. This,
coupled with a shortage of skilled personnel, slows down
the badly needed increase in production, Mulva adds.
Nada PETRONAS
It is, thus, important for governments to make
appropriate policies and for industry leaders to
spearhead the development of oil fields and critical
infrastructure, ranging from pipelines to refineries,
Mulva urges. Oil and gas companies must also address
environmental concerns by promoting energy-efficient
technology and alternative energy resources.
His Excellency Syed Kazem Vaziri Hamaneh, Iran’s
Petroleum Minister, says energy security is crucial
to ensure continuous expansion of world economic
activities and requires the cooperation of all countries.
Peaceful conditions, stability in the international
arena and the free flow of trade in oil and gas markets
are preconditions for global energy security, he adds.
As Asia is home to both major oil and gas producers
as well as consumers, the region should consider
establishing a uniform energy market to promote
energy cooperation, he suggests.
With its huge oil and gas reserves, Iran is capable of
playing a vital role in the world’s energy equation. But
Iran cannot meet the required level of investment and
technology needs on its own, and as such, participation
from major consuming countries is welcome, says the
Minister. He estimates Iran will require USD93.7 billion
in foreign investments, plus USD43.7 billion in domestic
resources through 2014.
Dr Fereidun Fesharaki, Chairman and CEO of
FACTS Global Energy, says high oil prices have had an
impact on Asia. Demand is growing fast in China and
more slowly in India but the rest of Asia is seeing some
stagnation.
Persian Gulf countries have now emerged as a
major demand growth centre. In 2007, China, India and
the Middle East were expected to collectively lock in
growth by about one million barrels per day, providing
a floor for global demand, he says.
On alternative fuels, Fesharaki observes that
industry enthusiasm has somewhat waned after an
initial burst of excitement. In particular, biofuel makers
now have to contend with high feedstock costs, which
have risen relatively faster than those of oil, due to
competition with food supplies.
• “Despite concerns about China’s increased strength and
aggressive search for raw materials including energy,
there are real possibilities for Sino-US cooperation to
protect sea routes from sabotage and to protect their
shared interest in stability in the oil-producing regions
of the Middle East.”
– Raymond F. Burghardt, Director of East-West Seminars,
East-West Centre, US
• “The partnership between resource holders and the
international industry has enabled the development
of Asia-Pacific Liquefied Natural Gas (LNG). National
companies are, of course, no longer just resource
holders, but highly capable operators with great
knowledge of their businesses. Some, like PETRONAS,
are developing wide international experience.”
– Peter de Wit, Executive Vice President for Global Business,
Shell Gas & Power International,
The Netherlands
• “The industry needs to overcome new challenges such as
climate change and sustainability of natural resources.
Solutions for these challenges can be found through
increased technological innovation and collaboration.”
– Norman Gildorf,
Senior Vice President, UOP LLC, US
• “A new energy structure architecture is emerging as
Middle East producers look to secure long-term markets,
while Asian economies seek to secure long-term energy
supplies. One example of the new energy architecture is
the trend towards cross- and joint-investments to create
win-win partnerships between the Middle East and
Asia.”
– Ali Obaid Al Yabhouni,
UAE Governor and National Representative for OPEC
• “High oil prices and sharply increased upstream spending
budgets of most oil companies have not yet provided
any significant improvement in global additions to
reserves but more time may be needed.”
– Thomas E. Wallin, President,
Energy Intelligence, US
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Nada PETRONAS
INDUSTRY
SUSTAINING
LNG BUSINESS THROUGH
PARTNERSHIP
By Beatrice Lye
At the beginning of 2007, there were 225
Liquefied Natural Gas (LNG) tankers
criss-crossing the world’s oceans, with
close to another 150 in the order books
scheduled to be delivered between 2007
and 2010. There were 32 LNG trains
worldwide producing LNG, with 13 under
construction and 17 more being planned.
Nada PETRONAS
C
learly, LNG is a booming industry. The global LNG
export volume has more than doubled since 1996
to more than 200 billion cubic metres in 2006. The
current 17 importer countries are expected to increase to 47
by 2020.
The industry is also changing rapidly. The signing of
long-term contracts for the supply of LNG, currently an
estimated 88 per cent of all sales, is being supplemented by a
growing number of arbitrage or spot buys. These short-term
buys enable the supplier to sell at higher prices in markets
where demand is spiking due to supply shortages during
unseasonably cold winters and pipeline disruptions.
China’s growing requirements for energy and the
shutdown of Japan’s largest nuclear power plant after the
Kashiwazaki earthquake continue to put pressure on buyers
to secure the much-needed quantities of LNG.
The word in the industry is that it is a sellers’ market. Are
happy days set to continue for PETRONAS’ LNG business?
The PETRONAS LNG Complex in Bintulu is still the world’s
largest production facility in a single location. Consisting of
three trains, the complex produces about 23 million tonnes
per annum and supplies almost 15 per cent of the world’s
LNG demand. Much of it goes to long-term buyers in Japan,
South Korea and Taiwan.
PETRONAS also made a breakthrough with the growing
Chinese LNG market this year when it secured a long-term
contract with Shanghai LNG Company Ltd.
In the area of LNG shipping, which is an inseparable
element of the LNG business, PETRONAS subsidiary MISC
Berhad is also the world’s largest single owner-operator of
LNG tankers. Its fleet of 26 LNG ships is scheduled to increase
to 29 by 2010. MISC has maintained an unblemished record
of delivering more than 4,700 LNG cargoes on time since
1983.
PETRONAS also has a 35.5 per cent stake in Egyptian LNG,
which increased the corporation’s LNG production capacity
by 1.8 million tonnes for financial year ended 31 March 2007.
This is part of its endeavour to retain its status as the world’s
second largest equity owner of LNG production capacity.
The corporation’s third LNG asset is the upcoming Dragon
LNG receiving and regasification terminal in Milford Haven,
Wales. Scheduled for completion in 2008, the terminal
gives PETRONAS an entry point for its LNG into the United
Kingdom and European markets.
However, while global demand for LNG continues to rise,
the industry is not immune to challenges. In July, PETRONAS
and Britain’s biggest domestic gas supplier, Centrica Plc,
mutually terminated an agreement for PETRONAS to
supply LNG to Centrica for 15 years, enabling both parties
to capitalise on opportunities presented by market forces.
PETRONAS can now seek higher prices for its LNG elsewhere,
while Centrica is able to secure its gas supplies at a cheaper
rate from other sources.
Against this backdrop of abundant challenges and
opportunities in the LNG industry, how does PETRONAS
remain one step ahead in this increasingly competitive field?
As PETRONAS President and Chief Executive Officer Tan Sri
Dato Sri Mohd Hassan Marican emphasised in his keynote
address at the industry’s biggest triennial conference, the
LNG15 in Barcelona, Spain, he believes in the long-term
model, where “traditional market solutions will help buyers
and sellers manage the volatility of demand, attract timely
supply to markets and support the substantial upstream and
downstream investments that suppliers and customers must
undertake to meet rising demand.”
Nonetheless, he called upon suppliers to offer more
flexibility and continue their commitment to safety, on-time
delivery and reliability.
Tan Sri Hassan concluded his address by saying, “The
LNG industry is built on a strong foundation of partnerships.
Relationships fostered in the early days of the LNG market
still prosper today.
“In our over two decades in the business, PETRONAS
has forged long-term relationships with our customers and
business partners. To us, all our buyers and partners are
important regardless of size, and we have demonstrated our
willingness to be flexible in meeting their needs for longterm mutual benefits.
“The flexibility and importance of long-term mutual
benefits is a prominent feature in the relationship anchored
on mutual understanding, respect and trust.
“These elements and values have stood the test of time
and I strongly believe that long-term relationships will
continue to be the foundation for a robust and healthy LNG
industry.”
An aerial view of the PETRONAS LNG Complex in Bintulu
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INDUSTRY
A STELLAR
PERFORMANCE
Revenue and profit soared to record levels yet again for the financial year ended
31 March 2007, thanks to the Group’s continuous emphasis on operational
efficiency and reliability, as well as the integrated nature of its operations.
This has played a key role in cushioning the impact of the disproportionate
increase in operating cost.
P
ETRONAS Group delivered another record performance
for the financial year ended 31 March 2007. While
supply disruptions, ongoing geopolitical uncertainties
and growing global demand continue to push crude oil
prices higher, tight capacities and operating cost escalations
resulted in a more complex and increasingly challenging
global oil and gas industry environment.
Revenue and profit before tax rose to an all-time high
of USD51.0 billion and USD21.1 billion respectively, both
increasing by approximately 15.0 per cent. The Group’s
balance sheet continued to strengthen with total assets
increasing also by 15.0 per cent to USD85.2 billion.
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FINANCIAL YEAR ENDED 31 MARCH
FY 2007
USD billion
51.0
21.1
24.5
12.9
85.2
49.4
28.7
10.4
Revenue
Profit Before Tax
EBITDA
Profit After Tax & Minority Interests
Total Assets
Shareholders’ Funds
Total Cash & Fund Investment Balance
Total Debt
CAPITAL EXPENDITURE
+/14.9%
14.7%
14.0%
13.2%
15.0%
23.8%
14.3%
(12.6%)
3.0
2.5
6.0
2.0
5.0
FY2006
restated
41.4%
24.8%
40.4%
41.4%
24.8%
41.3%
Liquidity
Current Assets/Current Liabilities
Cash & Fund Investment/Current Liabilities
2.73x
2.09x
2.55x
1.96x
Gearing
Total Debt/Total Assets
Interest Cover
0.12x
26.38x
0.16x
23.00x
Shareholders’ funds expanded 23.8 per cent to USD49.4
billion while Return on Average Capital Employed remained
strong at 40.4 per cent, on par with or superior to other
established players in the industry.
While stronger prices were a factor, PETRONAS’ ability to
achieve higher sales volume for its key products, i.e. crude
oil, refined petroleum products and Liquefied Natural Gas
(LNG) in a highly competitive and challenging environment
was also a significant contributor to the growth in revenue.
The Group’s manufacturing activities, comprising the
manufacture of petroleum products, LNG, processed gas
and petrochemicals, contributed USD28.5 billion to Group
revenue, compared to USD25.9 billion last year, effectively
adding value to its oil and gas resources.
Revenue from international operations and exports
contributed USD39.1 billion, accounting for 76.7 per cent
36.1
25.7
27.9
21.4
10
20.0
20
16.1
28.5
25.9
30
20.6
15.2
13.4
20
10
40
25.7
21.4
40
30
50
36.1
50
INCREASING REVENUE
FROM GLOBAL OPERATIONS
USD billion
44.4
44.4
51.0
STRONGER MANUFACTURING REVENUE
USD billion
of Group revenue, reflecting the success of the Group’s
globalisation strategy. Export revenue of USD20.3 billion
accounted for 39.8 per cent of total revenue, representing
12.4 per cent of total Malaysian exports.
The Group generated strong cashflow from operations
this year, more than sufficient to cover its investing and
financing needs. With this surplus, the Group’s cash and fund
investment balance expanded to USD28.7 billion.
The year’s outstanding financial and operational
performance was a testimony to the success of the Group’s
overall strategy of integration, value adding and globalisation.
This strategy, coupled with the Group’s effective management
policies and operational excellence, has served and continues
to serve PETRONAS well in addressing the challenges
encountered by the volatile and unpredictable oil and gas
industry.
51.0
3.5
FY2007
Profitability
Profit Before Tax Margin
Return on Total Assets
Return on Average Capital Employed (ROACE)
39.1
(by business)
Exploration &
Production
Others
Total
FY2006
3.1
1.9
5.0
34.5
Domestic
International
Total
CAGR 24.8 %
CAGR 20.8 %
0
0
FY03
FY04
Manufacturing Sector
FY05
FY06
FY2005
USD billion
36.1
15.3
17.9
9.4
62.9
31.5
19.8
13.9
KEY FINANCIAL RATIOS
(in USD billion)
FY2007
4.1
1.9
6.0
FY2006 restated
USD billion
44.4
18.4
21.5
11.4
74.1
39.9
25.1
11.9
FY07
Non-Manufacturing Sector
FY03
FY04
FY05
FY06
International Operations & Exports
FY07
Domestic Market
CAGR - Compound Annual Growth Rate
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THE ENGINE THAT
INNOVATION
Research and Technology Division’s initiatives promise to be strong
catalysts for future growth by way of increasing technological competency
and increasing the depth and breadth of PETRONAS’ offerings. The recent
success of the K200 go-cart engine is a shining example.
S
ince 1996, PETRONAS has embarked on a series of
engine development projects with considerable
success. The latest addition to its family of engines is
the K200 developed specifically for go-kart racing.
It all began with the Third Technology Transfer
Programme in 2003 when a team of engineers at PETRONAS
Research Sdn Bhd was selected for a stint at Sauber
PETRONAS Engineering AG (SPE) in Switzerland.
Upon completion of the programme, the engineers were
keen to put their skills to the test. At the recommendation of
the then Commission Internationale de Karting - Federation
Internationale de L’ Automobile (CIK-FIA) President Yvon
Leon, they formed a team to produce an affordable, cleaner
and environment-friendly four-stroke go-kart engine that
could potentially bring about a significant shift in the market
dominated by less-efficient two-stroke engines.
Building from scratch
Headed by Azahari Yahya (then Manager and
Development Engineer, Special Projects, Corporate Planning
and Development Division (CPDD)), the team began by
benchmarking the engine they had in mind against top
engines of similar class readily available in the market.
As soon as the engine target specifications were set,
design works followed using 3D modelling. Next up was the
sourcing of parts needed for the engine.
And after many man-hours of labour, the first K200 fourstroke go-kart engine was produced in June 2004.
Project Leader and Designer Md Isham Isnin says that
the letter ‘K’ in the name refers to ‘Burung Kelicap’, a type
of sunbird species that closely resembles the energetic
hummingbird. The figure ‘200’ signifies the engine capacity
of 200cc.
“And true to its name, the K200 is small and light due to
the fewer parts needed to build the engine,” Isham adds.
But the engine’s simple appearance is deceiving, in that
the K200 offers more power across the different engine
speed bands, relative to a conventional two-stroke engine.
Moreover, the K200 is cleaner because it allows for a
better air-fuel mix. Unlike a two-stroke engine, a valve system
in the K200 prevents exhaust gases from flowing back into
the chamber, thus improving combustion efficiency.
Equally important is the fact that the K200 promises
longer engine life because of a dedicated lubrication system
for moving parts (which is absent in two-stroke engines).
The K200 also produces less noise compared to a two-stroke
engine.
A total of six K200 engines were built in Switzerland. Each
engine was tested in a special room called a ‘dynamometer’.
At that stage, many crucial technical questions had to be
answered.
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COULD
Do the engines run smoothly as intended? Do they have
noise vibration and harshness issues? Does the cooling
strategy work? How about gasoline consumption and the
durability of the engines when subjected to extreme running
conditions?
To Kyairol Izwan Ghazali (then Development Engineer,
Special Projects, CPDD) who was in charge of development
and testing, the process was as thrilling as watching a baby
take its first steps.
Once the engines passed the test, they were put into a
go-kart chassis for actual driving. The Alpha Kart chassis was
chosen in line with the requirements for a four-stroke World
Formula Go-Kart championship.
The experience turned out to be unforgettable, recalls
Shaharuddin Hamid Mustapha, the Development and Testing
Engineer, who conducted the inaugural test drive. Having
driven the go-kart at as fast as 115 kilometres per hour, and
being an amateur at that, he believes the performance could
be a lot more exciting with a professional go-kart driver
behind the wheel.
Multiple benefits
Overall, the K200 is promising on a number of fronts,
says Isham. Amid environmental concerns such as carbon
emissions and climate change, the K200 is testimony - among
many others - of PETRONAS’ research and development
efforts that are aimed at addressing those concerns.
Mohd Suffian Sahadan, one of the Design Engineers
in the K200 project, estimates that if the engine is
commercialised, it could sell for less than US$2,000. This
would make go-karts more affordable and appealing to
Malaysian youths.
In turn, this would help the country to identify talents in
motor sports, he reckons.
The key is to persuade original equipment manufacturers
to take up four-stroke engines like the K200. However,
this is not an easy task because of sheer economics, Isham
concedes.
A switch to four-stroke engines requires substantial
investments in new production lines on the part of the
manufacturers, not forgetting the fact that established gokart championships still prefer to run on two-stroke engines.
But Isham is confident this will happen eventually.
Go-kart championship
“Our engine has a big commercial potential as the public
gets more environmentally conscious about the pollution
caused by two-stroke engines,” Isham argues.
Meanwhile, PETRONAS is not sitting idle on the engines.
The company is considering a single-make championship
using the K200.
The idea is to assess all drivers purely on skills since
everyone will be using a common vehicle with the same
engine specification.
Apart from introducing the K200 to Malaysia’s go-kart
circles, the championship will also serve as a platform for
the branding and marketing of PETRONAS’ products.
Regardless of the outcome, the journey thus far has
been rewarding. Fadhlan Nik Abd Aziz, an Analysis Engineer,
says the Technology Transfer Programme taught him more
than just the technical know-how.
At one SPE dinner in Switzerland, Fadhlan had the
opportunity to meet Peter Sauber, owner of the Sauber
Formula One team and co-founder of SPE. To Fadhlan’s
surprise, before he could introduce himself, Sauber said he
already knew who he was and even went on to chat with
him.
“That really opened up my eyes,” Fadhlan says.
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CORPORATE ROUNDUP
P
ETRONAS Carigali’s operations in Turkmenistan
reached a new milestone on 5 June 2007 when the
President of the Republic, His Excellency Gurbanguli
Berdymukhamedov,
officiated
the
ground-breaking
ceremony, launching the construction of PETRONAS Carigali
(Turkmenistan) Sdn Bhd’s (PCTSB) fabrication yard at Kiyanli.
At the event, Berdymukhamedov said PETRONAS was
the first foreign oil and gas company to have been awarded
the right to operate in Turkmenistan. He added that the
corporation had contributed significantly to the realisation of
his country’s plans to develop and construct offshore loading
and gas terminals, as well as other related infrastructure.
onshore gas terminal currently being constructed at Kiyanli.
Currently, almost 50 per cent of the fabrication yard has
been completed, with piling, civil building and other works
progressing smoothly.
In the area of oil production, PCTSB’s operations in the
Diyarbekir Field reached the two million barrel mark without
incident on 11 June last year. Production involved the use
of a mobile offshore production unit in the Caspian Sea,
with storage facilities provided via a floating storage and
offloading vessel - a mode of operation said to be the first in
the Caspian.
PETRONAS Around the World
PETRONAS CARIGALI
BREAKS NEW GROUND
IN TURKMENISTAN
Present at the ceremony were PETRONAS Carigali’s
Managing Director and Chief Executive Officer (CEO) Datuk
Abdullah Karim, Malaysia Marine & Heavy Engineering
Managing Director and CEO Wan Yusoff Wan Hamat,
members of the Turkmenistan Cabinet, and PCTSB General
Manager Sulaiman Abdullah.
PCTSB, which has been operating in Turkmenistan
since July 1996 under a production sharing contract (PSC),
produced its first barrel of oil in March 2006. Under the PSC,
PETRONAS holds a 100 per cent interest in Block 1 - a 1,900
square kilometre offshore area that includes three discovered
oil and gas fields, as well as other undrilled prospects.
Initial gas production at a capacity of 250 million
standard cubic feet per day (mmscfd) is targeted for the end
of Quarter One of 2010. This will be followed by 500 mmscfd
six months later.
The gas will be exported via a subsea pipeline to an
Currently, drilling is in progress at well EWT/3, a
development expected to enhance PCTSB’s oil production to
15,000 barrels per day.
To enhance local technical expertise in Turkmenistan,
PETRONAS Management Training Sdn Bhd and PCTSB
are jointly operating a training centre in Turkmenbashy.
Programmes at the centre are designed to train Turkmen
workers to qualify as operators and technicians at PCTSB’s
onshore and offshore oil and gas facilities.
The centre started training the first batch of 50 Turkmen
students in July 2005. The students graduated in July last
year. The second batch of 49 students commenced their twoyear training programme in October 2006 and a third batch
of 32 began training soon after.
PETRONAS has also provided scholarships to more than
80 Turkmen students to further their education at Universiti
Teknologi PETRONAS in Malaysia.
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PETRONASGAZPROM
TIEUP
PETRONAS has signed a Memorandum of Understanding
with Russian gas giant Gazprom, marking the beginning of an
international collaboration between PETRONAS and one of the
world’s largest oil and gas companies.
T
he memorandum provides for the development of
comprehensive cooperation between the companies
on the implementation of projects in Russia, Malaysia
and third countries.
It also defines the basic principles of Gazprom-PETRONAS
cooperation on projects to build gas infrastructure, including
underground gas storage facilities, pipelines and regasification terminals.
PETRONAS and Gazprom have also agreed to share
scientific and technical expertise in the areas of gas
prospecting, production, transport and storage.
At a meeting with PETRONAS President and Chief
Executive Officer Tan Sri Dato Sri Mohd Hassan Marican in
the second quarter of 2007, Gazprom Deputy Chairman
Alexander Medvedev said, “The memorandum lays a solid
foundation for long-term cooperation between Gazprom and
PETRONAS. We are talking about different projects ranging
from exploration and production to marketing energy
products and the sharing of experience.
“We are sure that joint work will strengthen the positions
of both parties in the foreign energy market.”
Medvedev also attended the 12th Annual Asia Oil and Gas
Conference in Kuala Lumpur, during which he said the AsiaPacific region was one of Gazprom’s key regions.
The Russian company intends to enhance its market
presence in the region by developing gas delivery systems,
LNG trading and hydrocarbon fields. The collaboration with
PETRONAS will provide valuable new opportunities for both
companies.
APPOINTMENT
PETRONAS Vice President of Gas
Business Wan Zulkiflee Wan Ariffin was
appointed as a new member of the
Board of PETRONAS with effect from 1
August 2007.
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CORPORATE ROUNDUP
D
espite being in existence for only 33 years,
PETRONAS has made enormous strides that have
earned the company a more-than-respectable
position in the international arena of oil and gas.
This is an observation made by Dr Fred R. Von der
Mehden at Rice University in Houston, Texas and Al Troner
of Asia Pacific Energy Consulting in their paper entitled
‘PETRONAS: A National Oil Company with an International
Vision’.
In the paper written for an energy forum by the
James A. Baker III Institute for Public Policy and the Japan
Petroleum Energy Centre in March 2007, the two industry
observers noted that PETRONAS had an advantage
from the start. It was set up as a company with the
goal of profit-making, rather than a statutory body that
could have been misconstrued as the nationalisation of
Malaysia’s hydrocarbon resources.
PETRONAS has been given the entire ownership of
and control over the country’s petroleum resources, and it
operates like any other commercial oil and gas entity. But
as a profit-oriented business entity, it has been making
significant contributions to Malaysia’s national monetary
reserves annually.
this period was its expansion into international operations
in the early 1990s, starting with its first upstream project
as an operator in Vietnam. It also became actively
involved in Africa where it saw a general lack of interest
from other petroleum companies.
PETRONAS has also entered the shipping business
through MISC Berhad. Although the move attracted much
criticism initially, it proved to be both highly profitable
and commercially viable. The PETRONAS subsidiary is
currently the world’s largest single owner-operator of LNG
vessels and the world’s second-largest owner-operator of
Aframax tankers.
By 2005, PETRONAS had signed agreements in 35
countries in Africa, the Middle East, Asia and Europe.
PETRONAS was involved in upstream exploration and
production in 59 ventures in 26 countries and was the
operator for 29 of these ventures.
Another example of PETRONAS going global was its
2006 purchase of a USD1.1 billion stake in Russia’s Rosneft,
its first Russian venture.
For financial year ended 31 March 2007, revenue from
international operations and exports contributed USD39.1
billion, accounting for 76.7 per cent of Group revenue,
PETRONAS EXTENDS
ITS FOOTPRINT
BEYOND NATIONAL
SHORES UNDER
TWO DECADES
In the early years, PETRONAS underwent a steep
learning curve, expanding its upstream operations
domestically while acquiring the necessary technological
know-how and capabilities. At the same time, it also
actively expanded and diversified into a broad range of
downstream activities in order to create value from the oil
and gas resources produced by its upstream operations.
This was in line with its value-adding, business
integration strategy.
These included oil refining;
marketing and distribution of petroleum products;
trading; gas processing and liquefaction; gas transmission
pipeline operations; marketing of liquefied natural
gas; petrochemical manufacturing and marketing; and
logistics and maritime operations.
The most noteworthy move PETRONAS made during
reflecting the success of the Group’s globalisation
strategy. Export revenue of USD20.3 billion accounted
for 39.8 per cent of total revenue, representing 12.4 per
cent of total Malaysian exports.
PETRONAS has also grown beyond its traditional
core energy interests by financing major Governmentsponsored infrastructure projects, such as the
construction of the PETRONAS Twin Towers and the new
administrative capital of Putrajaya. In recent years,
PETRONAS contributed to little over a third of total
Government revenue.
“PETRONAS has been a generally solid and wellrespected partner to both private and state entities
around the world,” the report concluded.
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‘NEW
H
FINANCIAL TIMES
IDENTIFIES
SEVEN SISTERS’
alf a century after the second
world war, the term ‘Seven
Sisters’ was coined to describe
the Anglo-Saxon companies that
controlled oil in the Middle East. Since
then, a startling change has taken
place, changing the terrain of the
global oil sector, possibly for good.
A report by the Financial Times
(FT) published on 21 March 2007
identified the ‘New Seven Sisters’, a
group of increasingly influential oil
and gas companies from countries
outside the Organisation for Economic
Cooperation
and
Development
(OECD).
The original Seven Sisters
included Standard Oil of New Jersey,
Royal Dutch Shell, Anglo Persian Oil
Company, Standard Oil of New York,
Standard Oil of California, Gulf Oil and
Texaco. ExxonMobil, Chevron, BP and
Royal Dutch Shell are ‘descendants’ of
the Seven Sisters.
On the other hand, the New Seven
Sisters are Saudi Aramco, Russia’s
Gazprom, CNPC of China, NIOC of Iran,
Venezuela’s PDVSA, Brazil’s Petrobras
and PETRONAS.
PETRONAS, in particular, has been
described as a role model, ripe for
emulation.
Mostly state-owned, the FT says
the New Seven Sisters control almost
one-third of the world’s oil and gas
production and more than a third
of its total oil and gas reserves. The
original Seven Sisters on the other
hand – which compacted to four
following industry consolidation in
the 1990s – account for about 10
per cent of the world’s oil and gas
production, while holding just three
per cent of reserves.
The rise of the New Seven Sisters
is bound to scale up and get more
prominent in years to come. The
International Energy Agency, an
established and trusted watchdog,
has estimated that 90 per cent of new
supplies will come from developing
countries over the next 40 years.
The shift is extraordinary. For the
past 30 years, 40 per cent of all new
production came from industrialised
nations, most of it controlled by the
original Seven Sisters.
“The reason the original Seven
Sisters were so important was that
they were the rule makers; they
controlled the industry and the
markets. Now, these New Seven
Sisters are the rule makers and the
international oil companies (IOCs) are
the rule takers,” Robin West, chairman
of PFC Energy, was quoted as saying
in the FT.
This change of hands in oil
muscle has carried with it another
phenomenon - the resurgence of
resource nationalism which began
in Mexico in the 1930s, found its way
to the Middle East in the 1970s, and
cooled only when oil prices declined
in the late 1980s and 1990s.
Having turned resource seekers,
national oil companies (NOCs) are
banding together to help develop
each other’s reserves, leaving industry
growth and the resources for world
economic development in the hands
of the New Seven Sisters and the
respective governments that control
them.
The biggest state-backed resource
competitor is CNPC whose rapid
push to secure international reserves
makes it powerful. But smaller NOCs
such as Petrobras and PETRONAS are
also “keeping international energy
executives awake at night.”
PETRONAS is an easily recognisable
name on the global stage, having
established its presence, most notably
in Sudan and Myanmar. About 30 per
cent of its corporate revenues are
from abroad and it operates in more
than 26 countries, producing oil from
about 50 projects, more than half of
which it runs, the FT notes.
Source: The Financial Times Limited 2007 at
http://www.ft.com/cms/s/471ae1b8-d001-11db94cb-000b5df10621.html
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MERDEKA SPECIALS
CELEBRATING
50 YEARS OF HARMONY
Today Malaysia stands at the threshold of a new age.
We are afforded opportunities in life that
our parents and grandparents only dreamt of.
But we also stand in danger of forgetting our past –
the values that have defined us
as Malaysians for half a century.
T
his sentiment resonates deeply within the heart of
PETRONAS. For over three decades, PETRONAS has held
the nation’s oil and gas resources in trust for its people
and is deeply committed to the future of all Malaysians.
Hence, for the 50th Merdeka Celebration, PETRONAS put
forth a single important message to all Malaysians: One
Legacy. One Destiny. (Satu Warisan. Satu Matlamat.)
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A Nation Rejoices –
the ‘Saya Anak Malaysia’ Contest
FOR the 50th Merdeka Celebration, PETRONAS rebroadcasted
its five most memorable merdeka television commercials
over major television channels. These formed the basis of a
public contest – the ‘Saya Anak Malaysia’ contest – wherein
participants were required to match a message to each of
the commercial and pen down a personal account of what
the nation’s independence means to them.
The contest attracted 4.4 million entries, more than
double the expected number. Part of the proceeds of the
sales benefitted the ‘Kumpulan Wang Amanah Pelajar-Pelajar
Miskin’, a Ministry of Education trust for disadvantaged
students.
Fifty winning entries were selected by a distinguished
panel of judges composed of the eminent historian Prof
Emeritus Dato’ Dr Khoo Kay Kim, educator and activist
Rasammah Bhupalan, former New Straits Times Group Editor
P. C. Shivadas, celebrated cartoonist Datuk Mohd Noor Khalid
(better known as Lat) and anthropologist Prof Dr Rokiah Talib.
PETRONAS Vice President for Oil Business and Chairman of
PETRONAS Dagangan Berhad Datuk Anuar Ahmad gave away
thirty cars and twenty motorcycles, all of national make, to 50
very happy winners.
In addition, 500 consolation prizes comprising PETRONAS
products, each worth RM500, were also given out.
‘Khazanah Bumi Merdeka’
EVERY Friday evening at 9.00pm, from the month of July
through September 2007, a special presentation by the major
oil and gas players in Malaysia aired over TV3. ‘Khazanah
Bumi Merdeka’ (Treasures of an Independent Land) was an
11-episode account of the history of the oil and gas industry
and the many strides it has made in its 100 plus year history.
Shot on location in various parts of East and West Malaysia,
the documentary also marked the first time that the major oil
and gas players in the country - PETRONAS, Shell, ExxonMobil
and BP - had come together to present Malaysians with an
opportunity to learn about an industry that has been playing
an immense part in shaping the nation’s development.
Aimed at educating the public on the various aspects
of the industry, the documentary took viewers on an
educational journey from the moment oil and gas was
discovered, through to the value-added processes in turning
crude oil not only into petrol for vehicles but also into a
range of products that Malaysians use in daily life.
But more than just plants and processes, oil and gas have
changed the lives and livelihood of many Malaysians. The
series told the story of development, opportunity, progress
and a better life from the eyes of the Chief Executive Officer,
schoolteacher, shopkeeper and fisherman. Employment and
educational opportunities were perhaps the most obvious,
but commercial vibrance and a new work culture and
standards have elevated their lives to a whole new plane.
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IN RETROSPECT
PETRONAS MERDEKA
ADVERTISEMENTS
THROUGH THE YEARS
What started out as a simple commemoration of an important national
event, PETRONAS’ Merdeka advertisements have gained almost a
cult following. Their lasting popularity was largely due to the ability of
the advertisements to capture the inner thoughts of Malaysians with
messages that clearly resonate within their own belief system.
P
ETRONAS Merdeka advertisements have always centred on the important principles of trust and unity. While each of
them deals squarely with this issue, each possesses a humour and lightness of touch that appeal to both the heart and
mind. The following are the five most memorable ones.
One Little Indian Boy: 1996
A flashback account by a now-grown Indian man of the day
when, as a little boy, he was woken up early by his father.
Still half asleep, he was given a bath and made to put on his
best clothes. He knew it was a special day, but did not know
exactly why. He and his father then cycled down the crowded
streets of Kuala Lumpur to an even more crowded place.
Lifted off the ground and seated squarely on his father’s
shoulder, he saw that he was in Merdeka Stadium and in the
distance was the Tunku proclaiming independence.
Local Hero: 1998
Amidst a nation maturing and gaining confidence as to who
we were and what we stood for, the advertisement featured
a young man riddled with self-doubt because he wore only
Gombak-made shoes. He thought that this was why he
could not find a girlfriend. He saw and felt imagined snubs
everywhere he went – from the attractive shopkeeper to
even the girl on a bus. He finally snapped, “So what if my
shoes were made in Gombak?!” The girl replied, “Nothing.
They make good shoes in Gombak.”
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My House: 1999
“Why do I like my house?” a precocious little boy wondered
out loud. “It’s big, it’s nice. My house is the best”, he
proclaimed. Indeed, if we could see things like children do,
we would agree that our ‘house’, with all the joys and pains,
and all things that pulsate with life, is the greatest.
Param’s Bicycle: 2003
Atan, Lim and Param lived and grew up together in the same
village, playing little pranks as children do and getting into
the usual trouble. Particularly memorable was an episode
involving some mangoes, a beehive and running for dear life.
Over the years life took them down different paths, until fate
intervened and they met, as old men, in a hospital. Param
and his bicyle were no more. But still, the memories of the
genuine friendship they shared were fresh and vivid. And
they noted too, with a tinge of regret, that their sons, seated
on opposite ends of a hospital bench, absorbed in their MP3
players and in their own worlds, were completely oblivious
to each other.
Special Shoes: 2005
‘Independence is synonymous with responsibility for oneself’
- this was the realisation two brothers came to after ogling
a pair of shoes in a shop window, griping about their father
who would not let them have the money to buy them. Their
conversation was overheard by a man who was having a
cobbler repair his shoes nearby. He, in turn, narrated the
story of a boy who had no leg, who was determined to be
independent and live a full life. As he put on his prosthetic
leg, the boys realised that he had told them his own story . As
the man walked to his chauffeur-driven car, he turned back to
them and said, “I have travelled far with it. When you choose
to walk, walk forward, not backward”.
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ALL TOGETHER
NOW
“Upon the conduct of each depends the fate of all”
- Alexander the Great
Any seasoned Merdeka veteran will tell you that the nation’s
independence was won through unparalleled dedication
and commitment to the task, and the coming together of the
various races in the then Malaya to chart a common destiny.
F
ifty years on, hard work and unity still remain the principal ingredients of nation building. And lest these lend
themselves to the dark recesses of our minds, PETRONAS in celebrating the nation’s 50th year of independence aired a
series of advertisements in the months of August and September 2007 on the themes of dedication to the cause and
national unity, with the latter entirely through the uncomplicated and untainted eyes of children. They all invite us to take
a retrospective look at ourselves and find the true meaning of independence, and to always embrace the values of mutual
trust, tolerance, respect and understanding.
The first in the series was ‘The
Boatmaker’ which extoled the value
of hardwork and genuine commitment
in building a thing of value that would
stand the test of time. It told the story
of a soon-to-retire boat maker who
half-heartedly built one last boat when
asked to by his friend.
The materials used were inferior
and his workmanship shoddy. When
the boat was finished, the boatmaker
was pleasantly surprised when told
that he could keep it as a token of their
friendship. His friend even threw in a
new engine for good measure.
His happiness, however, was shortlived when he found that the boat he
built was not fit to sail.
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The Children ‘Get It’
The other commercials in the series were of children who offered their candid, uncomplicated and completely unprejudiced
view of life and friendship.
Tan Hong Ming in Love
A doe-eyed boy gave a spontaneous confession of how he
secretly admired his best friend Umi Kazrina. His admiration was
not unrequited when Umi, in turn, confided that Hong Ming was
her ‘boyfriend’.
She/He
“ My best friend? He…. And she…
and he….”
Kawan Baik’ (Good Friend)
When asked who his best friend was, a Malay boy shyly pointed
to a Chinese boy beside him. Then he was asked, “If he is your
best friend, what is his race?” The question was met with puzzled
expressions on both the boys’ faces. “Race?” asked the friends.
“Race....like race car…?”
‘Tunjuk’ (Point)
“Who is your best friend?” The
spontaneous pointing to each other said
it all.
‘Kita’ (Us)
After successfully building
a ‘country’ and their
own respective ‘houses’
in a sandpit, a group of
children were seriously
thinking of a name to give
their new country. One
was unanimously agreed
upon – ‘Kita’.
‘Karate’
“What will I do if anybody messes with
Rachel? I’ll do this... like this… and
this…”
Against the background of globalisation and
new opportunities for growth and self-discovery
stands our precious legacy – the cornerstone of
our achievements as a people. And it is only by
recognising our shared legacy can we understand
and achieve our shared destiny.
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THE
MERDEKA
AWARD
On the 50th anniversary of our independence, we celebrated the values that
have guided and inspired us on our journey together as a nation. Many
Malaysians have made history in service to the country but, to date, there
has been no single award that honours their achievements.
I
n the spirit of unity and shared responsibility for our
nation’s future, PETRONAS led a core group drawn from
the Malaysian oil and gas industry to create the nation’s
most prestigious industry-led award.
Together with Shell and Exxonmobil, PETRONAS founded
the Merdeka Award to give due
recognition to Malaysian citizens
and organisations that have made
outstanding contributions in their
respective fields, and towards the
betterment of Malaysian society.
Benchmarked against the Nobel
Prize, the Merdeka Award seeks
to inspire excellence in a nation
that has reached a new milestone
in its history. It also aims to instil
an awareness of the challenges
- and equally the responsibility in
preserving our precious legacy.
In working to promote a more
competitive society, the Merdeka
Award underscores the fact that
the quest for individual excellence
will prove an important driving
force for the future of our nation.
Launched by Prime Minister
Dato’ Seri Abdullah Haji Ahmad
Badawi on 27 August 2007, the
Merdeka Award values human
achievement regardless of race,
sex, religion or ideology. It explores
the liberation of the human mind and spirit, and fosters
the realisation of human potential through the pursuit of
excellence.
Four of the five award categories are open to all
Malaysians living at home or abroad. The winners of each
Nada PETRONAS
category will receive a gold medal and prize money of
RM500,000. With the total prize money awarded in all
categories estimated at RM2.5 million, the Merdeka Award
will be the largest in Malaysia and is comparable to other
renowned prizes.
The Merdeka Award will be given away annually in the
month of Merdeka by the Prime Minister as the Award’s
Patron.
The five award categories are broadly defined to
encourage the widest possible field of nominations. Each
category emphasises the concept of excellence in the
broadest sense and acknowledges that our collective good
stems from the individual goal of doing one’s best.
The first award category recognises outstanding
contributions in the fields of education, the arts, sports and
the community. The contribution may be in any specialised
field, such as educational research, linguistics, fine or
performing arts, sports and community services, and must
or potentially be of high benefit to a large segment of the
community.
The second category rewards excellence in the area of
health, science and technology, either in primary or applied
research, innovation or advancement of technology in all
aspects of health, science and technology.
The third category – the environment - encompasses
the broader spectrum of environmental issues and
efforts, including renewal and conservation, and heritage
preservation.
As for the outstanding scholastic achievement category, it
is the only award that is of purely academic merit. This award
is presented to a Malaysian student or Fellow undertaking
postgraduate studies who has displayed exceptional
scholarship in the academic field.
The final category is about outstanding contributions
to the people of Malaysia. It is open to foreign nationals
who have made substantial contributions to the lives of
Malaysians.
All categories of the Merdeka Award are open to
institutions and organisations, with the exception of
outstanding scholastic achievement, which can be awarded
only to an individual. Former Malaysians who are naturalised
citizens of another country will not be eligible.
Nominations, which will be open each year, from
November to February in the following year, will be
managed by a nominations committee of at least three
qualified Malaysians or foreign individuals in each category.
The committee will invite qualified individuals to submit
names of candidates for consideration. Past winners of the
award will be ex officio qualified nominators for life, while
appointed nominators will hold their positions for a period
of three years.
The Merdeka Award strongly reiterates the Corporate
Social Responsibility (CSR) initiatives that oil and gas players
are already carrying out in their own capacities. The Merdeka
Award complements and enhances the CSR objectives of
the industry as a whole. Through joint endeavours of oil and
gas players, it would elevate the position and prominence
of Malaysian oil and gas CSR initiatives to national and
international platforms.
For all Malaysians, the Merdeka Award strengthens the
message that we each have a responsibility to give back to
humanity.
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Nada PETRONAS
MEANWHILE
AT THE GALLERY…
IMAGES OF
INDEPENDENCE
Through a year-long
programme (The Heart of
‘07), GALERI PETRONAS
highlighted a broad range
of themes and issues in
art and Malaysian society,
reflecting the evolution of
our society in the past
half-century.
Nada PETRONAS
T
he year 2007 kicked off with the
blockbuster Voyage: Kembara
Latiff Mohidin exhibition by the
iconic Malaysian artist, which was
followed by the art-historical show
Photojournalism and the Imaging of
Modern Malaysia from March to May
2007.
Highlights in the month of
August 2007 included 50 Ways to
Live in Malaysia, which showcased
half a century of relevant works by
Malaysian artists in the evolution of an
independent Malaysia.
Building Merdeka explored the
iconic monuments built to mark
our independence (such as Stadium
Negara, Parliament House and Subang
Airport), and the exhibition also
documented how they transformed
Kuala Lumpur for its future growth.
From October to December 2007,
the gallery featured explorations of
contemporary movements, new media
and gender-driven projects such as Out
of the Mould, a group show of prolific
new-generation Malaysian women
artists.
From December 2007 through to
February 2008, GALERI PETRONAS
features The Independence Project,
an international collaboration which
explores contemporary independent
artistic practices from Malaysia and
Australia.
The Heart of ‘07 presents a vibrant
and entertaining view of the social,
cultural and historical events that have
helped shaped our nation - a view
seen through the eyes of artists who
continually push the boundaries of
their creativity to find new forms of
expression.
What follows is a summary of The
Heart of ‘07.
GALERI PETRONAS is located at Level 3, Suria
KLCC. Admission is free.
Voyage: Kembara Latiff Mohidin
(16 January – 11 March 2007)
TOKITSUMUGI - The Grain of
Strands from Some Moments
(10 April – 13 May 2007)
Fifty new paintings (produced between
2002 and 2006) and the poetry of
prominent Malaysian artist Latiff Mohidin
were featured in this much awaited
exhibition. Highlights included book
publications, transliterations of Rumi/
Khayyam, Gitanjali and Tao Te Ching;
an anthology of poems (Sajak-Sajak
Lengkap); and a republication of the
book Garis.
Curated by T. K. Sabapathy and Dato’
Baha Zain.
This exhibition of kinetic sculptures
by Japanese kinetic artist and multidimensional space designer Masato
Tanaka was the artist’s Malaysian
premiere. He presented a ‘scenic
movement presentation’ of 12 moving
sculptures which combined art and
technology to create free movement.
GALERI PETRONAS and the Japan
Foundation, Kuala Lumpur collaborated
to bring this unique exhibition to the
public in celebration of Malaysia’s
50th Merdeka and the Japan-Malaysia
Friendship Year 2007.
Photojournalism and the Imaging of
Modern Malaysia
‘BUMI MANUSIA: Nusantara
Journey’ with PETRONAS Expedition
(23 March – 20 May 2007)
(26 May – 15 July 2007)
A subtle portrait of the shaping of modern
Malaysia is captured through the lens of
working photojournalists. Containing
some 90 images from the photographic
archives of present and past newspapers,
the exhibition highlighted the principal
social, cultural and historical events that
influenced and affected the course of
Malaysia’s history in the last 50 years.
Curated by Eddin Khoo and Prof Dato’
Dr Khoo Kay Kim.
This debut solo exhibition by Masnoor
Ramli Mahmud, a key member of the
MATAHATI artist collective, showcased
paintings, photography and video clips
illustrating his experiences from the 55day PETRONAS Nusantara 2006 Expedition
from Bintulu to Banda Acheh in Indonesia.
It also featured photographic accounts
of the expedition by the PETRONAS
Adventure Team.
Curated by GALERI PETRONAS and
presented by GALERI PETRONAS and
PETRONAS Motorsports.
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Nada PETRONAS
‘Daerah Samad’: 100 Sketches
by A. Samad Said
(12 June – 15 July 2007)
This debut exhibition of ink sketches
and handwritten documents by National
Literature Laureate Datuk A. Samad Said
demonstrated the celebrated author’s
understanding of line and colour, and
his astonishing command of the visual
medium. With visual expressions that
were sometimes abstract, personal
and obscure, this exhibition illustrated
how Samad succesfully created a visual
language to express ideas that could not
be communicated by the written word.
PIYADASA - The Malaysian Series
(20 July – 5 August 2007)
This tribute exhibition was held in
memory of modern Malaysian artist, art
theorist, art historian, critic, educator and
writer Redza Piyadasa, who died in May
2007. The exhibition featured 40 selected
paintings from Piyadasa’s Malaysian
Series.
These paintings continued his
conceptual
thrust
of
combining
traditional Asian art forms with
contemporary Western art impulses,
while addressing issues of nation, religion,
race and globalisation. The works span
approximately two decades of Piyadasa’s
art practice up to his demise, bringing his
career to a definitive close.
Curated by T. K. Sabapathy.
Building Merdeka – Independence
Architecture in Kuala Lumpur
1957 -1966
50 Ways to Live in Malaysia
(15 August - 30 September 2007)
The collective geniuses of 50 of Malaysia’s
most well-known artists were showcased
in this exhibition, featuring 50 artworks
made since 1957 to the present day. The
exhibition showcased a broad crosssection of Malaysian artists and included
celebrated pioneer modernists such as
Syed Ahmad Jamal, Ibrahim Hussein,
Latiff Mohidin, Jolly Koh, Nirmala
Shanmugalingam Dutt, Ismail Zain,
Joseph Tan, Khalil Ibrahim, Eric Peris and
Sulaiman Esa.
Senior artists represented included
Fatimah Chik, Dzulkifli Buyong, Simryn
Gill, Wong Hoy Cheong, Yusof Ghani,
Victor Chin, Amron Omar, Zakaria Ali,
Kok Yew Puah and Raja Shariman.
Contemporary practitioners included
Juhari Said, Ramlan Abdullah, Ahmad
Zakii Anwar, Jailani Abu Hassan, Bayu
Utomo Radjikin, Ahmad Fuad Osman,
Hasnul Jamal Saidon, Shia Yih Yiing,
Soraya Talismail, Paiman, Ivan lam, Kow
Leong Kiang, Yee I-Lan, Sharon Chin, Ise
and Mutalib Musa.
The exhibition painted a picture of
modern Malaysia that was inspired by
sub-themes such as the environment,
society, communities, religion, politics,
gender, architecture, leisure, food and
historical events, both local and global
- all of which have contributed to the
way we think and feel as Malaysians. It
also showcased the range of media that
Malaysian artists have explored in their
quest, specifically painting, sculpture,
installation, printmaking, photography,
textiles and new media.
Curated by GALERI PETRONAS.
Ten iconic building projects were realised
between 1957 and 1966, endowing
Malaysia’s capital city with new national
landmarks and structures. The buildings
were Merdeka Stadium, Merdeka Park,
Dewan Bahasa dan Pustaka, Stadium
Negara, Houses of Parliament, Muzium
Negara,
Masjid
Negara,
National
Monument, University of Malaya campus
and Subang International Airport.
These iconic structures provided key
institutional and national spaces that
highlighted the emerging geopolitical
importance of Kuala Lumpur.
The exhibition also showcased the
documentation of these 10 projects
and included architectural drawings,
models, photographs, murals, sculptures
and films. The exhibition told the stories
behind each construction - the people,
architectural rationales and feats involved
in the construction of each building.
It also examined the balance between
aesthetics, practicality, national pride and
affirmations of social and infrastructural
progress.
Curated by Associate Prof Dr Lai Chee
Kien.
(21 August – 30 September 2007)
Watermark of Piyadasa’s Malaysian Story No 2, 1999, mixed media and collage on board.
Nada PETRONAS
PETRONAS on Film
(21 August – 30 September 2007)
In tandem with the 50 Ways to Live in
Malaysia exhibition, GALERI PETRONAS
screened a compilation of the best
PETRONAS Merdeka and religious festival
television advertisements (which were in
reality short films), directed by celebrated
director Yasmin Ahmad. Over the years,
these award-winning commercials, which
portray our multiracial essence, have
resonated deeply in viewers’ hearts with
fine stories that cut across boundaries of
gender, age, race and religion.
These important films also give voice
to PETRONAS’ message of One Legacy.
One Destiny.
‘Out of the Mould’: Age of Reason
(25 October - 2 December 2007)
The works by Malaysia’s most prolific
‘new generation’ of women artists are
showcased in this exhibition. Their
internationally
recognised
artistic
practices reflect the freshness of their
own presence within a modern Malaysian
society.
The exhibition featured the art
of Yau Bee Ling, Shia Yih Yiing, Nur
Hanim Mohammad Khairuddin, Nadiah
Bamadhaj, Azliza Ayob, Hayati Mokhtar,
Bibi Chew, Sharmiza Abu Hassan,
Umibaizurah Mahir Ismail and Yee I-Lann.
Curated by Shireen Naziree and
GALERI PETRONAS.
Spain through the Lens of a
Malaysian Photographer - A
Glimpse of Islamic Heritage in Spain
The Independence Project Contemporary Spaces in Malaysia
and Australia
(14 December 2007 – 6 January 2008)
(13 December 2007 – 10 February 2008)
An impressive collection of 44 colour
photographs showcases the beauty of
Islamic heritage in the Spanish region
of Andalusia, as captured by the lens of
Alex Moh. The exhibition is presented in
collaboration with the Embassy of Spain.
This exhibition covers aspects of
independence as seen through the
lens of artistic practices, independent
spaces and social contexts in Malaysia
and Australia. The Independence Project
features the works of 16 contemporary
Australian and Malaysian artists, and
emphasises the ways individual artists
question and define themselves, and
construct independent positions outside
mainstream artistic practice.
Curated by Alexie Glass, Rahel Joseph
and GALERI PETRONAS. Presented by
the Australian High Commission and
Australia International Cultural Council
(AICC).
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