Friday 5 April 2013

Malaysians want more transparency on Petronas

Malaysians want more transparency on Petronas
By Chua Jui Meng

MALAYSIA’S non-commodity Khazanah Nasional, founded in 1993, is ranked 23 with US$34 billion in assets and a Linaburg-Maduell Transparency Index (LM-TI) of 5.
The world’s largest SWF is Norway’s oil-based Government Pension Fund-Global. It was set up in 1990 and is currently registered with assets worth US$664.3 billion with a perfect 10 LM-TI.
UAE-Abu Dhabi’s oil-based Abu Dhabi Investment Authority, established in 1976, is ranked second with US$627 billion with a 5 LM-TI.
At third ranking China’s non-commodity SAFE Investment Company which was founded in 1997 and now manages assets worth US$567.9 billion with a 4 LM-TI.
That’s the top three SWFs in the world. Now, let’s focus on our neighbours.
Singapore’s non-commodity Government of Singapore Investment Corporation that was set up in 1981 is ranked 8th with assets at US$247.5 billion and a 6 LM-TI.
Following at 9th rank is another Singapore non-commodity SWF, Temasek Holdings which was established in 1974. It has US$157.5 billion in assets and a perfect 10 LM-TI.
Even countries like Kuwait, which was severely damaged by Iraq’s bombing and brief occupation, Libya, Kazakhstan, Algeria and South Korea which was far poorer than Malaysia in the 60s, 70s and 80s.
Malaysia Boleh! (Malaysia Can!) is thus really Malaysia Tak Boleh! (Malaysia Cannot!) under BN-Umno’s 55-year rule.

Sovereign Wealth Fund Rankings

Largest Sovereign Wealth Funds by Assets Under Management
Country
Sovereign Wealth Fund Name
Assets $Billion
Inception
Origin
Linaburg-Maduell Transparency Index
Norway
$664.3
1990
Oil
10
UAE – Abu Dhabi
$627
1976
Oil
5
China
$567.9**
1997
Non-Commodity
4
Saudi Arabia
$532.8
n/a
Oil
4
China
$482
2007
Non-Commodity
7
China – Hong Kong
$298.7
1993
Non-Commodity
8
Kuwait
$296
1953
Oil
6
Singapore
$247.5
1981
Non-Commodity
6
Singapore
$157.5
1974
Non-Commodity
10
Russia
$149.7*
2008
Oil
5
China
$134.5
2000
Non-Commodity
5
Qatar
$115
2005
Oil
5
Australia
$83
2006
Non-Commodity
10
UAE – Dubai
$70
2006
Oil
4
UAE – Abu Dhabi
$65.3
1984
Oil
9
Libya
$65
2006
Oil
1
Kazakhstan
$61.8
2000
Oil
8
Algeria
$56.7
2000
Oil
1
UAE – Abu Dhabi
$53.1
2002
Oil
10
South Korea
$43
2005
Non-Commodity
9
US – Alaska
$42.8
1976
Oil
10
Iran
$40
2011
Oil & Gas
n/a
Malaysia
$34
1993
Non-Commodity
5
Azerbaijan
$32.7
1999
Oil
10
Brunei
$30
1983
Oil
1
France
$25.5
2008
Non-Commodity
9
US – Texas
$25.5
1854
Oil & Other
9
Ireland
$18
2001
Non-Commodity
10
New Zealand
$16.6
2003
Non-Commodity
10
Canada
$16.4
1976
Oil
9
Chile
$15
2007
Copper
10
US – New Mexico
$14.9
1958
Non-Commodity
9
Brazil
$11.3
2008
Non-Commodity
9
East Timor
$11.1
2005
Oil & Gas
8
Bahrain
$9.1
2006
Non-Commodity
9
Oman
$8.2
1980
Oil & Gas
1
Peru
$7.1
1999
Non-Commodity
n/a
Botswana
$6.9
1994
Diamonds & Minerals
6
Mexico
$6.0
2000
Oil
n/a
Chile
$5.9
2006
Copper
10
US – Wyoming
$5.6
1974
Minerals
9
Saudi Arabia
$5.3
2008
Oil
4
China
$5.0
2007
Non-Commodity
4
Angola
$5.0
2012
Oil
n/a
Trinidad & Tobago
$2.9
2000
Oil
8
US – Alabama
$2.5
1985
Oil & Gas
n/a
Italy
$1.4
2011
Non-Commodity
n/a
UAE – Ras Al Khaimah
$1.2
2005
Oil
3
Nigeria
$1.0
2011
Oil
n/a
Palestine
$0.8
2003
Non-Commodity
n/a
Venezuela
$0.8
1998
Oil
1
US – North Dakota
$0.5
2011
Oil & Gas
n/a
Vietnam
$0.5
2006
Non-Commodity
4
Kiribati
$0.4
1956
Phosphates
1
Gabon
$0.4
1998
Oil
n/a
Indonesia
$0.3
2006
Non-Commodity
n/a
Mauritania
$0.3
2006
Oil & Gas
1
Equatorial Guinea
$0.08
2002
Oil
n/a
UAE – Federal
n/a
2007
Oil
2
Oman
n/a
2006
Oil
n/a
UAE – Abu Dhabi
n/a
2007
Oil
n/a
Papua New Guinea
n/a
2011
Gas
n/a
Mongolia
n/a
2011
Minerals
n/a

Total Oil & Gas Related
$2,989.4




Total Other
$2,192.4




TOTAL
$5,181.8



*This includes the oil stabilization fund of Russia.
**This number is a best guess estimation.
***All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their assets, from other publicly available sources. Some of these figures are best estimates as market values change day to day.
Updated December 2012

My biggest beef with the BN federal government is this: Why is there no oil-based SWF for Malaysia?
Malaysia is the 27th largest oil producer in the world, rolling out 693,700 bbl/day. Only 114 countries are listed as at 2009 and 2010.
Compare Malaysia with the above mentioned countries that are doing better in SWF asset management: Kuwait (10th at 2,494,000 bbl/day), Libya (17th at 1,790,000 bbl/day), Kazakhstan (18th at 1,540,000 bbl/day), Algeria (15th at 2,125,000 bbl/day), South Korea (64th at 48,180 bbl/day) and Singapore (82nd at 10,910 bbl/day).
Petronas , founded in 1974, is today a global player in oil and gas exploration.
Why is the government just satisfied with an annual RM100 million CONTRIBUTION to Kwan since 1988? Are you treating Malaysians as monkeys and giving out peanuts?
Where has Petronas’ trillions of ringgit in revenue over the past 38 years gone to? Did Petronas’ oil and gas exploration presence in 32 countries outside Malaysia contribute or help facilitate the bulk of RM1.08 trillion in capital flight in the last decade?
Why avoid establishing an oil-based sovereign fund for the people and country? Is it because financial transparency and accountability would be a pain?
Petronas’ Q3 2012 profits are down 22%. That is a significant drop in financial performance.
But all these beg the question: With such wealth over 38 years, why is Malaysia’s national debt, as reflected by Budget 2013, at RM502 billion or 1.3% short of the 55% legislated debt ceiling?
But Deputy International Trade and Industry Mukhriz Mahathir had let the cat out in an interview with The Edge last year, claiming that Malaysia’s debts were well managed as the bulk of the RM800 billion borrowings were domestic!
A debt is a debt! You have to repay all, whether domestic or foreign.
Also, which is the true figure for our federal debt? RM502 billion or RM800 billion?