Malaysia

Petronas defends Bumiputera record, says no to companies without expertise

BY JENNIFER GOMEZ
October 05, 2013

Petronas will continue helping Bumiputera companies but it will not award contracts to those with no track record in the oil and gas sector, said its CEO and president Tan Sri Shamsul Azhar Abbas (pic).

He said Petronas does not sideline Bumiputera companies as alleged by the Malay Economic Action Council (MTEM) but awards projects to them based on merit, transparency and competence.

Last year, Petronas gave out RM52.48 billion in contracts to companies which were majority-owned by Bumiputeras. It was almost double the RM29.35 billion awarded in 2011. In 2010, the total was RM25.97 billion.

He said that supporting the national agenda was not new to it and, in fact, was a good thing for the industry.

Shamsul said that while Petronas welcomed participation from Bumiputera companies, it would not directly award projects to companies without oil and gas expertise and experience.

"Our operations and project delivery will be at risk in the hands of incompetent and inexperienced partners and I will not stand for that," Shamsul said in an interview with the weekend edition of The Edge.

MTEM is an organisation that represents more than 60 business groups.

The Edge report also noted that statistics proved that Petronas had done its bit to groom Bumiputera companies for the oil and gas industry.

Shamsul said it was currently working closely with those who wanted to improve and enhance their capabilities, such as the Malaysian Oil and Gas Services Council (MOGSC), an association of 430 members, of which 90% are Bumiputera companies.

MOGSC president Sofiyan Yahya told The Edge in a separate interview that over the years more and more Bumiputera companies have changed their business strategy from just being agents to actually doing the job themselves.

He also said that its members found Petronas's services exportable as they followed international standards.

“That is why we find many Malaysian professionals working all over the world. We are not jaguh kampung but jaguh dunia," Sofiyan said.

He also dismissed claims that companies that could not secure jobs are caught in a chicken and egg situation, meaning that they cannot build a track record which is necessary to win contracts.

Sofiyan offered that those who held such views did not understand the nature and needs of the industry, where when a big contract is handed to an industry player, a whole range of services needed to be provided.

"For example, foreign oil majors in the country need to hire locals for support services and are rarely ever standalones,” he said.

Sofiyan pointed out that many Bumiputera companies have gained a toehold in the international arena.

In Parliament recently, Prime Minister Datuk Seri Najib Razak revealed that Petronas had contributed RM732 billion to the government since its inception in 1974 until the end of last year.

It has also been widely reported elsewhere that MTEM has constantly accused Petronas of neglecting local vendors when dishing out contracts and for failing to carry out its responsibility to contribute to the growth of Bumiputera entrepreneurs.

It said that the Malay business community has seen negative growth since the leadership change in Petronas, which had inhibited the development of Bumiputera and local small and medium entrepreneurs. – October 5, 2013.