Monday, June 23, 2008

Mantua Should Be Blogging

Very good points Mantua, you should start your own blog, seriously. Cheers.

mantua has left a new comment on your post "Fair Rebuttals":


Indonesia preceded Malaysia in the use of production sharing contracts and produces much more oil. Pertamina, by all accounts, should have been far more successful than Petronas. It did'nt because:

1) it did not have the technical skills & vision to venture out to become a fully functional oil explorer & producer in its own right (unlike Petronas);

2) large parts of its income disappeared into private coffers of staff, managers & directors alike;

3) whatever was left & returned to the govnt (billions) disappeared into the ex-President's overseas accounts.

As for Statoil, I am uncertain about its income source. It could be the state royalties which are much less the the lion's share of PSCC's profit oil. So any comparison on financial perforamce is probably of little use.

Statoil may well have been favoured in Norway's allocation of exploration blocks (much like Petronas in Malaysia) but would have to compete on a level playing field on overseas venture,like Petronas.

I do not subscribe to the public vilification of Petronas as the large majority of the issues raised are the responsiblity of the government, not Petronas. However, the latter's overall performance rates no more than a B- because:

1. it has failed to harness the skills & enterprise of the Malaysian population because of its ethnically biased hiring policies, which cannot be totally blamed on the govnmt;

2. its liking for sponsorship of big-time events which have little pay-back value e.g. sponsorship of F1 racing teams which generate a lot of overseas advertisement exposure but for what purpose? Petronas gains little from overseas exposure as it has no direct sales outlets, unlike other oil majors. Do you see Statoil or other national oil agencies spending so heavily on adverts?


Sayuti said...


1. wow. i never knew there was an 'ethnically-biased' hiring policy in petronas. do u work in petronas? i do, but so far have never been ask to comply to such policy. why? because there is no such policy!

there's 'malaysianisation' policy though, which benefits all malaysian. not any particular ethnic or race.

2. petronas has over 30 overseas ventures worldwide. there are direct sales outlets as well - like the one attacked with a homemade bomb yesterday. the F1 sponsorship expose the petronas brand to over 6 billion F1 fans out there - heck, at least one of them could be a prospect business partner.

p/s: dali, i've posted a comment on your fren's blog - fusion investor - pointing out to the possible locations of the missing pages he claimed, but my comment was not approved. i wonder why...

Salvatore_Dali said...


i think not that its not approved... it takes time for the blog owner to come around to read the comments before posting them... anyway, pls feel free to post them here... i would like to do a review

Sayuti said...

i've posted the comment last night and i was hoping it gets published today. in my comment, i believe the 84 pages (page 81 - 165) are there in the website in:

1. the group sustainability report (28 pages)
2. the financial highlights (31 pages)
3. the consolidated figures (8 pages)
4. the half year figures in USD and RM (both 8 pages each)

so, 28 + 31 + 8 + 8 + 8 = 83 pages.

the remaining one page must have been the summary of P&L (also published in the website).

mantua said...

Ah, Sayuti

Would you care to check with your HR dept. how many non-Bumi Petroleum Engineers were hired by Petronas from years 1993 to 2002.
Very few? Zero?

Of course, nobody in their right mind would issue or proclaim such a discriminatory policy in public or even in private. Much easier to use the waste paper-basket for undesirable applicants.

I met many of those unsuccessful applicants who moved on to very successful careers with other oil companies both here and overseas. The latter are Malaysia's (and Petronas')loss.

This lopsided hiring ratio was unlike earlier years which resulted in the development of many competent & capable petroleum specialists (of all races). I do not know what the hiring ratio is since 2002 (left malaysia) but would be very pleased if you can prove me wrong.

6 billion F1 fans worldwide, but how many billion in Malaysia where the only Petronas sales outlets exist?

To be successful overseas, Petronas need to demonstrate a history of successful exploration & field development, superior technical expertise & cost-effectiveness as an oil & gas operator.

Very little leeway to be gained from F1 exposure, I'm afraid, but it's your money.

Why not divert those advertising $$millions to developmment of alternative energy resources? How about air conditioners run on solar power? No sunlight, no need for aircond.

Sayuti said...


1. if i'm not mistaken, between those period, the demand for PEs was not as high as today because most people thought that there is no future in the profession. some university even close down their PE department. i dont think there were much recruitment for bumi PEs as well.

i know through my own involvement in the recruitment process. i've seen and processed the stack of cv's coming in everyday in the recruitment department during my two weeks attachment there and i can assure you that no application is treated in discriminatory manner.

although i'm not sure how was it like 5 or 10 years ago, i will go and check the data just to make sure.

2. i need to reiterate again that the sales outlets of petronas' product are not just in malaysia. it's everywhere around the world.

we have sales outlet selling oil, lubricants and other petroleum products in japan, india, china, thailand, sudan, south africa, indonesia, and cambodia, not just in malaysia. latest venture is in italy with the acquisition of selena.

if shell can use ferrari and their F1 team as a branding tool, why can't petronas use bmw-sauber for ours?

3. one time, i asked the same question on alternative energy resources to one of our vp's. he gave us the following answer:

petronas does invest in r&d. we even have a whole division called r&t.

researching alternative energy resource will divert us from our main focus - which is petroleum. it is in our second mission statement: 'petroleum is our core business'.

fyi, we are researching on more efficient ways to use petroleum energy e.g. energy-efficient internal combustion engine (another reason why we are involved in f1), lubricant technology, fuel technology etc.

4. air-conditioner run by solar energy? thermodynamics will point out that that would be inefficient, but heck, who am i to say when i almost flunked my thermo.

tan sri hassan did suggest during one of his annual policy address that we use sunlight to save electricity on lights during office hour. he cynically remarked "we build the towers (referring to the one in sabah) with glass walls so that lights can come in, but you guys put up curtains..."

Seng said...


My short comment is that these 4 documents are not part of typical Annual Report format that one expects from listed companies or a company the stature of Petronas. (especially when CEO Hassan claims that for all intent and purposes, Petronas reporting is like Bursa listed companies).

For fuller explanation, you can refer to my comments in my blog here.


random said...

tan sri hassan did suggest during one of his annual policy address that we use sunlight to save electricity on lights during office hour. he cynically remarked "we build the towers (referring to the one in sabah) with glass walls so that lights can come in, but you guys put up curtains..."

LOL.. hilarious

Sayuti said...

dear seng,

i've read your reply. i guess i was wrong in my earlier assumptions. thanks for pointing that out.


yes, it was hillarious. the whole audience (was broadcast to 11 locations worldwide) burst into laughter at this remark. he was answering a question from a staff in sabah, about how to reduce waste of energy and steps that can be taken to be more energy-efficient.

mantua said...

Oh Dear,Oh Dear

Two weeks exposure to Petronas HR hiring process & you're prepared to draw a conclusion on its hiring policies, Sayuti?

I have 20 years dealings with Petronas staff & draw my conclusions from personal observations & direct feedback from affected parties, here & overseas. (No names, of course - they all have too much to lose)

Just look at the racial breakdown of the current Petronas workforce, partcularly Senior Management. Is it the random outcome of an unbiased, merit-based hiring and promotion policy?

I have no axe to grind, no personal issues with Petronas, just pointing out that it have would done much better had it been more open-minded in the past. And maybe even hiring more forthcoming employees like you?

Petronas' role as the guardian of a vital national resource decrees that it should look beyond the myopic policies of our wretched, racial-based, govnmt & chart its own course in the national interest (not very easy,I concede).

Malaysia has produced many excellent oil specialists & managers & should have totally Malaysianised the whole industry by now.

See what Sarawak Shell has done with its top executive posts - Malaysian Managing Director many years ago. Then try to explain the total absence of senior technical managers in Esso Malaysia (EPMI). What has Petronas done about that glaring discrepancy, given its championship role on Malaysianisation? Has Petronas dropped the ball simply because very few Bumi employees work for EPMI? And, no, I'm not a disgruntled ex-EPMI employee either.

Sayuti said...


1. i may have less experience than you and yes, i've been in this industry for just a short while. in fact, i have the same impression about petronas being a bumi-dominated company in the past but the two-weeks hands on experience on recruitment + another two and a half years in the petroleum management unit change my perspective in this regards.

i have also worked with and gotten feedbacks from a lot of people with the same experience level as you are in petronas as well as contractor - bumis and non-bumis, foreigners and locals - to draw my conclusion.

2. i could only answer your question on the racial breakdown with a simple yes - it is the outcome of an unbiased, merit-based hiring and promotion policy (read: unbiased policy - not unbiased people).

it would be a lie if i say there is no biased personnel in the process, but those who made biased decision will have to answer to the auditors and face disciplinary action if found guilty - and i've seen this taken place (i'm not in liberty to disclose the details though).

it is not fair to conclude petronas is ethnically-biased just because a lot of bumi happens to hold senior positions in the company over their non-bumi counterparts. they must have had more merits, else, we wont have people like datuk yeow, george ratilal, chen kah seong, collin wong, raina yong, effendy cheng (those are only the ones i know) holding senior management position in petronas (including vp, md/ceo of subsidiaries and gm).

3. malaysia has produced many excellent oil specialists & managers - yes, i totally agree but where are they now?

there are as much bumis as the non-bumis out there working in the middle eastern or european companies. they offers up to seven-folds salary to our workers and we cannot match those offers simply because it will create public outcry like we're facing now.

you can go and ask shell or epmi or murphy oil top management on how much pressure petronas has put on them to fill this senior positions with malaysians. even when shell decided to restructure their organization so that it would centralize its asean operations - petronas intervene because it will effect our malaysianisation policy.

it's a global shortage of technical experties out there.

some trade-off has to be made between this malaysianisation policy and operational continuity. to ensure continuous running of operation is much more important, hence some critical position cannot be left vacant thus non-malaysians are employed.

when we have enough supply of technical experties who are willing to work with a fraction of the pay offered by the middle eastern, only then we can resolve this issue.

4. then again, i'm just very new in the industry.

mantua said...

Thanks for your feedback, Sayuti.

Let me relate a story about my visit to the Dutch Embassy in London in early 1983 to collect a work visa following a successful job & visa application thro' Mobil Netherlands.

On seeing me, the visa clerk (a Dutchman) burst into a 5-minute tirade about how coloured people were swamping his country, taking away jobs from Dutch nationals, etc, etc. I calmly picked up my stamped passport, went to the nearest payphone & called my ex-boss who was then Technical Manager in Woodside Petroleum in Perth, Australia. To cut a long story short, I ended up in Australia 4 months later after 3 short months in a luxury hotel in the Hague at Mobil's expense.

The moral of the story? In this increasingly borderless world, skilled personnel vote with their feet while myopic, racist-minded administrative numbskulls remain stuck to their desks.

I'm pleased to hear that these various manpower issues are being addressed by Petronas. For the sake of the nation, I hope your policies prove more successful than in the past.

The issue of loss of skilled personnel moving to higher paid jobs overseas is not unique to Malaysia. It underlines the need to advance the local economy to allow incomes to rise to levels seen in developed countries, at which time the brain drain becomes more manageable. It is never eliminated altogether (nor should it be) but's that for another forum.

jayam88 said...


i dont know why mantua is grilling you over the issue of petronas recruitment policy.
in the first place, only bumi were willing to work at petronas because of the lower than norm salary paid by petronas. at certain position, only contracted jobs were farmed out. and the bonus at petronas, nothing to shout about! all in all, its not attractive to non-bumis to work at petronas becos of poor financial reward.
anyway, why mantua complaining about when you walk into shell,esso you see more non-bumis there at higher level.
nothing racial about this except thats how things goes!
i have to accept this, i have accepted this when i started working in a chinese dominated bank back in 1970s. even when i passed with flying colours a promotion test, i did not get the promotion. so instead of grumbling, i just move to another bank, and life goes on.
every nation you go have some unwritten policies, every corporation have them too.
just get on with life, unless you want to be a politician to change all these!
by the way, i agree with petronas to invest into f1 team. this is called brand-building. in case you dont know, our oil will dry out next 7 years or so, so its crucial to secure new fields overseas and petronas compete with other well known names for new fields.
f1 surely done petronas world of good in brand-building and it may be considered very cheap investment relatively since f1 is covered world-wide and seen by 6 billion people.

i think petronas is a global recognised company not by chance. under hassan marican it has transformed as one of the best managed in the WORLD!
cheers. life goes on ...

mantua said...

One final comment, Dali.

Thanks for a great blog - it's only one I bother to read consistently.

BTW, I do not have the stamina to do my own blog, plus my inability to stand fools easily will guarantee its early demise. Cheers.

Sayuti said...


i agree.

i could relate your experience to one gm who was assigned to set-up petronas office in bahrain sometimes in 1998. he was treated like some third world countries beggar by the local vendors when he sourced for supplies and materials. the situation turned after the twin towers was officially launched and made headlines across the globe.

whatever professions we're in, be it technical or administrative, we could never go anywhere with a racist-mindset. racialism, may be. those are two different ways of thinking.

thanks for your insight and sorry if i sound a bit rude. its a known trend in youngsters this day. huhu.

too bad you're not blogging. i believe we could learn a lot from your experiences.


sorry for flooding your blog with these comments. the topic is just something i feel strongly about.


Salvatore_Dali said...

sayuti & mantua,

I am happy to have u both grace my blog with good value add comments... welcome anytime... I do think Petronas' policy is non discriminatory, except maybe at board level ... except for the top 50 or so execs, I believe it is common industry knowledge that foreign and smaller players use Petronas as a happy hunting ground.

The grip has been that Petronas would pay 2-3x higher expat pay packages for expats compared to similarly qualified locals. Naturally this pisses off the locals. There is also the feeling that the expats willing to come to Petronas are the second-grade in terms of quality and experience... why else would u come to Petronas? Any of the top 10 o&g companies can offer better rewards.

Though locals at Petronas are better paid compared to other GLCs, they would be easily snapped up by foreign and smaller players easily doubling or even tripling their salaries.

The view has it that after 5 years or so, you would know whether u can make it to the top 50-100 execs... most who know its a harder nut to crack would jump ship for a good package elsewhere.

Petronas needs to treat and groom locals better. General Electric knows it is a happy hunting ground for other companies, but people management is critical to ensure for better professionalism. Why discriminate btw locals and expats... give them the same package.

Sayuti said...


i've given my comment on the expat vs local issue as well as the topic discussed here in someone else's blog here:

its in malay though.


Ginglith said...

Hey first up, great blog you have here. And keep up with the chick pics. :)

My 2 cents:

I do not think there is an ethnically-biased hiring policy in Petronas. Promotion and career advancements though are another thing altogether but I don't think it's limited to Petronas. The white man glass ceilings are still prevalent in many MNCs despite the best efforts of our govt & Petronas at nationalizing our workforce.

However, where I think its absolutely criminal is Petronas sourcing policy. As everyone knows, only companies with significant Bumi equity can do business with Petronas AND the PSC partners (that's the SSBs, Nipon, Murphy etc.) and this extends down from toilet paper through to directional drilling services. Even the Schlumbergers, Halliburtons, Technip etc. have to go through localized entities with Bumi equity in order to secure contracts with Petronas and its PSC operators.

Trust me, there are a LOT of fat cats surrounding KLCC. (remember the 2-company-in-the-world-selling-drilling-mud bullshit that we were fed?)

On the note of sponsorship - Petronas is building a global brand name and its only right for the company to participate in world events. Same goes with CNOC, PetroChina, ONGC etc.

Saying F1 sponsorship is useless is like asking Rolex not to sponsor the US Masters.

Oh, and I do agree with Mantua. Petronas is NO Pertamina. While one is exceptionally inept, corrupt and inefficient, Petronas has a modicum of integrity and is actually a company that many oil rich countries PREFER to deal with. Theres' a whole host of reason why but I'll leave that for another day...

Tribech said...

Dear Sayuti,

Regarding your comment...

"there's 'malaysianisation' policy though, which benefits all malaysian. not any particular ethnic or race."

Can you kindly elaborate what is this 'malaysianisation' policy. Is this a Petronas policy or a goverment initiative?

Can you kindly provide the specifics as I have not heard about this policy before (who initiated it, the Acts involved).

On another note, does F1 really have 6 billion fans ? Can you quote the souce for this statistic. Your kind response is appreciated.