KUALA LUMPUR – The government has refuted claims that Petronas was pressured into selling its entire interest in a natural gas project in Azerbaijan for RM9.41 billion, or that there was political interference involved.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said the sale of its asset to Russian oil and gas company Lukoil on October 1 was part of its asset and business portfolio revaluation effort.
This is after opposition leader Datuk Seri Anwar Ibrahim (Port Dickson-PH) and several other Pakatan Harapan MPs alleged that Petronas was forced to rid its asset to meet the government’s dividend demand.
Mustapa said the reality of the matter is that Petronas is capable of paying its dividends, including the RM25 billion for this year.
He added that the asset had been identified as a candidate for exit since 2019, although the decision was put on hold last year due to the impact on its value from the Covid-19 pandemic.
Additionally, the dividend payment to the government is based on assessment by the company’s board of directors, in line with its current financial situation.
“In determining the amount of dividends it is capable of paying, the board must ensure that the firm is able to comfortably finance its operation costs, loans, and to make reinvestments.”
“Also, the approval to sell Petronas’ assets in Azerbaijan was made on October 1, while the dividends were announced in (February and) July. As such, the sale is not related directly or indirectly.
“Hence, the government strongly rejects Anwar’s claim that there is a link between the sale and the need to pay dividends.”
Anwar, however, said the minister’s analysis that there is no link between the asset sale and dividend payment – as the decision to rid its interests in Azerbaijan was made in 2019 – is flawed, as the businesses typically make decisions based on future projections.
“They prepared (for the sale) because they anticipated problems with obtaining enough funds. That’s future planning. Meaning, they knew that the government dividend will force them to sell,” he said.
Mustapa maintained that this is not the case, saying: “I strongly deny that Petronas was pressured.”
Earlier in the Dewan Rakyat proceeding, Anwar had moved a motion to debate the sale of Petronas’ asset in Azerbaijan in the lower House, claiming it fulfils the requirement under the Standing Order on matters of urgent public importance.
Dewan Rakyat Speaker Datuk Azhar Azizan Harun then allowed for the matter to be raised in the Special Chamber.
Anwar had argued that the issue at hand concerns the country’s economy, and as such, would be appropriate to be debated in the House.
Azhar however denied his request, saying proceedings in the Special Chamber are no different than those in the lower House.
Other than Anwar, Datuk Ngeh Koo Ham (Beruas-PH) and Khalid Samad (Shah Alam-PH) had also raised similar concerns in the chamber on the sale of Petronas’ entire interest in the Shah Deniz gas project. – The Vibes, October 27, 2021
