BOMBSHELL! NAJIB’S US$7BIL BLUFF EXPOSED – NO WONDER PETRONAS CEO RISKED GETTING SACKED: NO CASH BUT A BARTER TRADE, LOPSIDED ARAMCO DEAL LETS SAUDIS PICK & CHOOSE ‘JEWELS’ IN RAPID PROJECT – AT MALAYSIA’S EXPENSE

CRUDE , NO CASH: ARAMCO DOES NOT DENY THAT PETRONAS JV WILL NOT INVOLVE A CASH INJECTION – TRANSACTION IS ESSENTIALLY A HYBRID BARTER DEAL

As previously reported the Aramco press release concerning its JV with Petronas did not say that Aramco is investing USD 7 Billion in Malaysia.In fact it implies its participation in the Aramco-Petronas JV will be in crude oil, not cash.

The story was published after a  query was put to Aramco CEO Amin Naseer.Naseer has since been sent the article published, which he has not denied.

It appears then that the Aramco-Petronas JV is essentially a hybrid barter deal,which Aramco and Petronas have described as one where Aramco agrees to supply “up to 70 per cent of the crude feedstock requirements of the refinery. (while) Petronas, on the other hand, will supply natural gas, power and other utilities”.

In addition, there appears to be some provision for Aramco to acquire a 50% stake “in selected ventures and assets of the Rapid project within Pengerang Integrated Complex.”

Note that the “selected ventures and assets” are not named in the announcement.It would have been a simple matter to name the company or companies that would be acquired, but Aramco and Petronas have chosen not to do so.
Little wonder then that Petronas CEO Wan Zulkiflee chose to air his objections to the deal publicly,
For that,he is more than likely to be sacked.
PETRONAS CEO Wan Zulkiflee May Be Sacked, And An EPF Bail Out Of RAPID Likely The Implications Of PM Najib’s Claims Of Economic Sabotage 
By Ganesh Sahathevan
“We never take on a project with the view that we have to depend on investors for funding to complete the project,” Wan Zulkiflee told senior editors at a briefing.

While PM Najib provided no evidence of who exactly “almost sabotaged” the Aramco-Petronas JV,we do know that  Petronas CEO and President Datuk Wan Zulkiflee Wan Ariffin himself expressed concerns about the JV just two days before signing, and he did so publicly ,via a press conference that he himself called.The Star reported these matters:

Wan Zulkiflee expressed surprise at the report of Saudi Aramco pulling out of Rapid when it had not gone into any agreement with the entity from Saudi Arabia.“How can there be a situation of a party pulling out of something when the party was not part of it in the first place?” he said referring to reports of Saudi Aramco supposedly pulling out of Rapid.“From day one, we have stated that we are able to fully fund Rapid. We are and will not be dependent on anyone for this project. We are close to 60% complete, costs are within projections and the refinery will be ready by 2019 followed by the petrochemical portion by 2020.” 

The above was preceded by an earlier report in The Star,dated 25 February 2017  in which Petronas seemed to be warning off PM Najib and his government.Headlined “Let Petronas Do Its Job”, the story included the following statements:

There has been a fair bit of speculation surrounding Aramco inking a deal with Petronas in relation to the latter’s Refinery and Petrochemical Integrated Development or Rapid project in Pengerang, Johor. The latest is that both parties will sign an agreement on Monday during King Salman’s visit to Malaysia.

Petronas has not said anything about any potential deal with Aramco, except that it is always in talks with potential partners, but that any deal inked would have to be on Petronas’ terms. In other words, beneficial to Petronas and not lopsided, as it should be.

Petronas’ president and CEO Datuk Wan Zulkiflee Wan Ariffin recently told editors in Kuala Lumpur that Petronas never takes on projects with the view that it has to depend on investors for funding to complete the project.

That said, partnering Aramco should have its benefits, considering it is not only the company with the vastest oil reserves, but also the most valuable company in the world today. The deal just has to be struck on equally beneficial terms.

…..the O&G resources of the country belong to all Malaysians, and they have to be handled with care.

It does appear then that it was the Petronas CEO himself who was trying to discourage Aramco, and he was not afraid of doing so publicly.

Then there is the matter of the EPF. Najib is reported to have said:

“Some unpatriotic people had spread claims that the Employees Provident Fund (EPF) was almost bankrupt and that the government was unable to pay the salaries of its civil servants.

“The Saudi Arabian government had received this wrong information about our country and thus, were quite doubtful about investing in Malaysia.

“We had to meet them and correct the facts that Malaysia is among the best countries in the world (to invest in). When they were convinced, they finally agreed to invest with us” .

However, Aramco sells its crude to Petronas, and it would,as any oil company would, be interested only in the viability of its client. If otherwise, Shell, ExxonMobil and others would not be investing in say Nigeria. Put in another way, oil companies have long ago learnt to limit their exposure to the oil assets that they deal with, managing to ring-fence these from the problems of the countries they deal with.

Therefore the matter of EPF would be of interest only if the  EPF is expected to bail-out the RAPID project, for a bail-out is what it would be.If not, the EPF would already be an investor in the project. A bail out should not be unexpected, given that the JV  agreement with Aramco seems not to involve any injection of cash.

– http://sahathevan.blogspot.my

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