Decentralising Oil&Gas

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Apparently TS James Masing, the Deputy Chief Minister of Sarawak, is confident that Sarawak companies can takeover whatever Petronas is doing in Sarawak.

TS Masing was more or less saying that Sarawak has lots of reserves, of which Petronas is not doing anything with it, so they were going to mine it themselves.

Not to sat that Brooke Dockyard and Engineering Works Corporation can’t do the job, but whether they are willing to do it, since their core business is building things to float on the sea, not extracting stuff from the seabed.

Without going into the practicalities of setting up an O&G mining and exploration operation in Sarawak totally controlled by the state, the question is, would you sell off as much of your non-renewable resources as possible without due consideration for the prices they would fetch during a time like this?

Even if Sarawak has endless depths of petroleum and LNG, do we want Sarawak flooding the market and creating another glut that will rock the sector, push prices down and make all the off-shore rigs become too costly to operate and companies to really shut down instead of just shedding staff?

Is decentralising O&G decisions something that we can afford to have in Malaysia at a time when we are seeing consolidation of the sector to create stronger O&G players that can be better compete globally?

After all, O&G is a global game.

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