There's No Tomorrow

Hantu Laut

Melayu, Melayu, Melayu!

Hampir semua yang keluar membantah GST pada 1 Mei 2014 di Padang Merdeka, KL adalah orang Melayu. 

Anak-anak Melayu yang suka budaya lepak dan senang diperbodohkan.

Cina dan India dimana............???

Sumber:Helen Ang's Blog

Let us leave the maddening crowd and worry about the world's more pressing problem......fossil fuel!

At the rate we are pumping fossil fuel out of mother earth's belly, we will soon run out of this irreplaceable commodity.

The End Of Fossil Fuels

Fossil fuels, as the name suggests, are very old. North Sea oil deposits are around 150 million years old, whilst much of Britain’s coal began to form over 300 million years ago. Although humans probably used fossil fuels in ancient times, as far back as the Iron Age¹, it was the Industrial Revolution that led to their wide-scale extraction.

And in the very short period of time since then – just over 200 years – we’ve consumed an incredible amount of them, leaving fossil fuels all but gone and the climate seriously impacted.

Fossil fuels are an incredibly dense form of energy, and they took millions of years to become so. And when they’re gone, they’re gone pretty much forever.

It’s only a matter of time

Clearly fossil fuel reserves are finite - it's only a matter of when they run out - not if.  Globally - every year we currently consume the equivalent of over 11 billion tonnes of oil in fossil fuels. Crude oil reserves are vanishing at the rate of 4 billion tonnes a year¹ – if we carry on at this rate without any increase for our growing population or aspirations, our known oil deposits will be gone by 2052.

We’ll still have gas left, and coal too. But if we increase gas production to fill the energy gap left by oil, then those reserves will only give us an additional eight years, taking us to 2060.  But the rate at which the world consumes fossil fuels is not standing still, it is increasing as the world's population increases and as living standards rise in parts of the world that until recently had consumed very little energy.  Fossil Fuels will therefore run out earlier.  

It’s often claimed that we have enough coal to last hundreds of years. But if we step up production to fill the gap left through depleting our oil and gas reserves, the coal deposits we know about will only give us enough energy to take us as far as 2088. And let’s not even think of the carbon dioxide emissions from burning all that coal.  Read more.

THE HUMBUG

Hantu Laut


There are many mercenary writers like this guy who indulged in idiotic spin. He may sound smart to many below average IQ Malaysians, but sorry to say, I am not buying. 

He pathetically compared 'apples and oranges' with complete disregard of proper technical analysis.

It's not rocket science to conclude that Mr Ng is nothing but a humbug.

Let's get down to the nitty-gritty of his pat and contrived comparison. I wouldn't bore you with the prolixity of a lengthy debate but get to finishing line as quickly as possible.

First and foremost, Norway is a much bigger producer of crude oil on much smaller population.

At its peak Norway produced 3.2 million bbl/per day, but now production has petered to about 2.0 million bbl/per day on a population of 5 million people. It is also the world's 3rd largest exporter of natural gas.

Simple arithmetic will tell you the amount of massive surpluses in oil revenue going into government coffers, hence, the massive sovereign funds and multiplier effect of more oil surpluses and dividends from sovereign funds. Norway needs not tap into the funds as yet and until such time it has exhausted its oil wells.

Malaysia, on the other hand, currently produce around 670,000 bbl/per day and export only about 270,000 bbl/per day and import another 160,500 bbl/per day of crude to supplement its domestic consumption. Of its natural gas production of 61.73 billion cu m, only 33.1 cu.m were exported. Latest census shows that Malaysia's population is now almost 30 million and has bigger land mass.

It's again not rocket science to tell you that Malaysia is not exactly net exporter of oil and to think that there are plenty of leftovers is wishful thinking and sheer foolishness.

Major portion of the recurring national budget and the huge unproductive subsidies are financed by profits from oil revenues.

Again, it is people like Mr Ng who benefitted from these subsidies.

By the way, non-oil producing Singapore is one notch higher than Norway in per capita income.

So, Mr Humbug Ng, if you can't tell the difference between the skin of an apple and that of an orange, .......please, don't ever try to sell something you have absolutely no clue about.

So! Who Says Only Malaysia Arrest Protesters!

Daryl Hannah arrested in White House oil protest

American actress Daryl Hannah has been arrested in front of the White House along with other environmental protesters who oppose a planned oil pipeline from Canada to the US Gulf Coast.

Hannah was released after paying a $100 fine, following her arrest for failure to obey a lawful order, said US Park Police spokesman Sergeant David Schlosser.

More than 70 people were arrested in the Tar Sands Action protest on Tuesday, which is named after efforts to block the proposed Keystone XL pipeline project to bring oil sands petroleum from Canada to Texas refineries.Read more.

Be Careful Whom You Select As Your Leader

Hantu Laut

Limbang in the pocket,oil rich blocks in the pocket.

Tell me how could someone be so stupid as to even consider sitting at a negotiating table for something already in the hands and under his full control?

Can a prime minister and his cabinet, without the approval of Parliament, dissolved sovereign rights over part of its territory, disputed or otherwise, to another country?

As a layman, not knowledgeable in constitutional law, I don't know, but I do know my common sense tells me it sounds not right.Something seriously amiss here.

Why was there no disclosure for a decision of such magnitude which deprived Malaysians in general and Sabah in particular of huge economic benefits?

Pak Lah only told half a story when he said Brunei has dropped the claim on Limbang which, sadly, was refuted by Brunei the next day making him looking like a fool.

Why was the surrender of the oil fields not mentioned before? Why were Pak Lah and the whole cabinet tight-lipped over the whole affair? Did Pak Lah bulldozes the thing through and presents it as a fait accompli to the cabinet giving them no choice but to endorse it?

The story only come to light when Murphy Oil have to make disclosure to the NYSE.

Did any member of the cabinet voice their objection to this rather unusual bilateral agreement that's more favourable to Brunei.If the area comes under Brunei why weren't they there first to stake a claim and start oil exploration?

Limbang should not be the subject of a claim.This territory was annexed during the times of the White Rajah and the sovereign right was reaffirmed when Sarawak was made a colony.Request by Brunei for return of the territory was rejected by the British on the ground that the people of Limbang do not want to be part of Brunei.Why Pak Lah and his cabinet members not bothered to look at the historical background is most puzzling.There shouldn't be any negotiation with Brunei on Limbang or the oil fields.

If Brunei can reclaim Limbang than the Philippines can reclaim Sabah and Thailand can reclaim some of the northern states of Peninsula Malaysia. It is absurd that based on disputed claim we caved in and gave away a goldmine.

What can Brunei do if we don't agree? Can they go to war with us? Will the British help them to go to war with us? These are pertinent questions we should ask ourselves before we sat at the round table.

We hold the trump card yet we lost.

We'll wait and see how Najib and the cabinet handle this very dicey issue.

It's The Economists, Stupid !

Hantu Laut

Hooray! The price of crude had fallen below $50 a barrel.The price slid to as low as $48.64 today.Who was right those mumble-jumble sycophantic economists or .........? Than you have those who made foreccasts and predictions but didn't have the balls to put their names on it.

Employing academicians who spent more time trying to please their bosses to listen to what is pleasant to their bosses' ears rather than doing some serious research to predict short and long term economic trends is as good as not having any of those blighters on board.They are not worth their salt.

It is even more disheartening to hear that almost every leader in our government are sold on the idea of the nation's immunity to the global economic meltdown purportedly due to our strong banking/financial system and strong fundamentals whatever that might mean.

Strong finances and healthy foreign reserves are just some of the many components that make up the whole economic pie.There is an array of other things that influence the workings of the economy which eventually boils down to one single objective, the making of money.The more money a nation has the more prosperous the people are .There are only two things money can't buy in this world, the air we breathe and immortality, everything else costs money.

In economics, one must not forget the law of supply and demand, the very essence of market forces.Dearth of supply will increase prices, abundance of supply will depress prices.Than there is a new element, not found in the old economic theory, that have been added to the new scheme of things to influence market and market prices, it is called speculation.Speculation can be a powerful tool in setting market prices.These are the wonderful inventions of the economic gangsters.These are bands of white collar criminals loaded with other people's money to raid the world markets in search of anything they can get their hands on and steal your whole life saving away from you. Would you in your wildest dream ever imagined that the price of palm oil can touch RM4,500 per ton ? Do you honestly think that's the real value of the commodity? Do you think price of crude oil at US$147 a barrel is a reasonable level for optimum economic consumption? Just like a balloon if over inflated it would burst and burst it had.

Over the past two decades the world has been teetering on the verge of an economic disaster never seen before due to over-speculative indulgences in every aspect of its commercial activities.The bubble had burst and would take a while to recover.

If the Malaysian government think they have consummated defences against catching the bug that most other more developed countries are caught in and are presently in the throes of recession than there must be something wrong with the yardstick we used to measure our economic activities.The sooner we wake up to the reality that the honeymoon and the good time will be taking a break soon the better it would be, at least to have a contingency plan in case the situation turned bad.

In the United States (US) the three big car makers in Detroit have recently declared they are in serious financial trouble.General Motors(GM) the leading car makers have cash reserve of US$30 billion and have declared they would be running out of cash in 2 to 3 months time.With the dramatic decline in sales of its cars the company have to use its cash reserve to pay for its recurring expenditure at the rate of US$5 billion a month which means the total reserve would be completely exhausted in 6 months.So, even if you have money when things go bad, that money will be gone in no time.As at September 2008 Malaysia's foreign reserve stood at US$32.3 billion, not much bigger than the GM's reserve.

The three big car makers GM,Ford and Chrysler were not on the original list of patients for bail-outs when the US Congress approved the bail-out package.They are now seeking government bail-out which they probably will not get.Their troubles are of their own making, incompetent management and products quality problem.The same problem faced by Proton here.

I believe the US Government will not bail them out but would ask them to file for Chapter 11, a bankruptcy protection from creditors that allow the company to reorganise without threat of foreclosure from creditors.Some creditors may end up as shareholders of the company under a reorganised scheme.

I have said in my earlier posts there is usually a time lapse before we feel the effect of the global recession.At the moment everything seems fine but it may not be so by the end of the 1st quarter of next year when the recession bites in,unless something dramatically good happened along the way that changed the whole global economic scenario.

Precaution is better than cure.

Petrol And Diesel Below MR1.50 A Litre ?

Hantu Laut

In my post 'Where Crude Oil Heading For' I predicted the price of crude would fall below US$50 per barrel.The likelihood of it going below that level look more and more realistic now.The huge stockpile in the US helped to drive price down.OPEC's production cut have not helped to stabilise price.The cut of 2 million barrel a day since September had no effect on keeping price sliding further down. The group are calling for further cuts.

India and China would require less need for energy as their economies begin to slow down in the next few months.Japan, one of the largest economy in the world is in a recession.The US,Europe ( the largest in the world) and most other countries are already in a recession.Only Malaysia and most third world countries are not ?

The current US crude price stand at US$53.90.The London Brent closed nearer the $50 mark at US$51.84 a barrel.Unusually cheaper than WTI ( West Texas Intermediate) which used to get around $1.00 to $2.00 higher than Brent.WTI is sweeter than Brent with lower sulphur content hence the higher price.

In 1998 the average price for crude was about US$12.00 a barrel and 4 years ago the average price was about US$38.00 a barrel.The price peaked at $147 few months back not so much due to supply and demand but more due to speculations by nasty speculators.

Middle East producers which have lower production costs may be able to sustain such low prices but new oilfields and those in deep waters may lose money due to higher production costs.

Those in Petronas may not be the happiest people now if they don't have huge forward contracts. If they didn't have any than production cut should be an option to cut down losses.

Malaysian motorists should be happy soon if the government continued to pass on the cheaper price.If price falls below US$50 a barrel than the price of petrol and diesel can posssibly be adjusted to as low as RM1.50 a litre.

Before 1990 the price of petrol was RM0.89 a litre.The drastic increase was this year when crude price shot up to as high as US$ 147 a barrel.At least for the next few months Malaysians should be happy with cheaper fuel and falling prices of other consumer goods.

Farmers must be the dumbest people. At least in Sabah they are.The prices of green had gone up about two weeks ago when most other items are falling.

The price of crude may pick up again during the 1st or 2nd Quarter of next year if the global economy do not slide further down and those greedy hedge funds stopped screwing the world's financial markets again.

Where Crude Oil Heading For?

Hantu Laut

Have we reached 'peak oil'? Would the world's industrial output come to a grinding halt when we ran out of fossil fuel.

Peak oil is not about absolute depletion of crude oil and the world running out of it.It is a theory of whether oil extraction have reached its peak and in terminal decline as featured in the 'Hubbart Curve'.

Below is Hubbart's theoretical chart

Click to read:

From the said chart he theorised that oil extraction would decline to zero by the year 2200.

Will it happen? I would think so, maybe, not on the exact Hubbart's time frame, but the day would come when mother earth would run out of fossil fuel. I am also optimistic that by then humans would have found abundance of alternative sources of energy through technological advancement and new inventions capable of mass production of energy producing substances.

The recent high oil prices we saw this year was not the consequence of the law of supply and demand but has an added element of human greed in the form of speculation of oil futures.Again greedy speculators took advantage of this forward and futures contracts and took it to the casinos.

In 1972 the price of crude oil was around US$3.00 a barrel.During the Yom Kippur War or the Arab Oil Embargo in 1973/74 the price of oil quadrupled to US$12.00, not because of shortages but because of Arab's anger at America and the West for having sided with Israel.The Arabs put a brake on productions that increased the price.This year we saw the highest price of over US$150 per barrel fuelled by rising demands and needless to say price highly aggravated by speculations.

Prices have begun to fall over recent weeks as speculators moved out of the market in anticipation of the financial market collapse.The crude oil market is now finding its own price level.

Below is a chart showing the prices of crude between 1947 to May 2008:

Click to enlarge

With increasingly high unemployment in the developed economies, industrial outputs are going to plummet to a low level and consumption of energy would likewise follow.

As more people lose their jobs, businesses going into bankruptcies and reduction in global industrial outputs the demand for oil would show a sharp decline.Consumption would continue to decline as long as the global economy continue to shrink which is expected to continue well into 2009.With reduced global demand prices are expected to fall below US$50 a barrel before the year end.

If the global recession become hard-headed and carry on without any sign of recovery than prices may even drop below US$30 per barrel by the first-half of 2009.

It may sound like good news but it is not.In fact it is a scary scenario, it means the global economy is in the doldrums and there would be widespread hardship among the populace of the world.

Those who have cash are kings and can go bargain hunting.

QUIZ

Test Your Knowledge of the Economic Crisis

The Petronas Mythbuster

Hantu Laut

Received in my email the letter below from a friend.

The letter was authored by an employee of Petronas who took it on himself to clarify the actual position and the inner workings of the organisation to counter the myth about the company.

I leave it to my readers to decide the veracity or mendacity of the story.

Dear all,

After reading all the chain mails and blogs, I feel called to reply, because of the relentless attacks and allegations -- most of which are inaccurate or baseless -- against PETRONAS.


PETRONAS' STAFF SALARY & BONUS
1) The salaries paid to PETRONAS' employees are not as high as people think. At best, they are just industry average. And these are not attractive enough for some who left PETRONAS to find work at other companies (mainly from the Middle East) which are willing to pay more. Why do they pay more? The oil and gas industry worldwide has been facing acute shortage of qualified or experienced personnel, so most companies are willing to pay lots of money to entice and pinch staff from their competitors.

Bonus? There has NEVER been a bonus amounting to 6 months or 12 months throughout the 33 years. On average, it is 2 months. But don't ever think we don't deserve it. We more than deserve it. A lot of us work really hard, some in the most extreme of conditions. Those who have been to and worked in northern Sudan, for example, would testify that it's like working in a huge blower oven. Southern Sudan, on the other hand, is almost all swamps and mud. Imagine having to go through that kind of heat, or waddling in muddy swamps, day in and day out.


QUALITY OF CRUDE & REFINED PRODUCTS
2) Malaysia produces about 600,000 barrels of crude oil per day (and about 100,000 barrels condensate). Of this crude volume, 339,000 barrels are refined locally for local consumption. The rest is exported (and yes, because it has lower sulphur content it fetches higher prices).

Malaysia also imports about 230,000 barrels of crude oil per day, mainly from the Middle East, to be refined here. This crude oil contains higher sulphur and is less expensive (so the country gains more by exporting our crudes). In Malaysia, this crude is processed by PETRONAS at its second refinery in Melaka, and also by Shell at its Port Dickson refinery.

Different refineries are built and configurated to refine different types of crude. And each crude type yields different percentage of products (diesel, gasoline, kerosene, cooking gas etc) per barrel.

But most importantly, products that come out at the end of the refining process have the same good quality regardless of the crude types. That's why PETRONAS, Shell and Exxon Mobil share the same pipeline to transport the finished products from their refineries to a distribution centre in the Klang Valley. The three companies collect the products at this centre accordingly to be distributed to their respective distribution networks. What makes PETRONAS' petrol different from Shell's, for example, is the additive that each company adds.


PETRONAS' ROLE, FUNCTION & CONTRIBUTION
3) A lot of people also do not understand the role and function of PETRONAS, which is essentially a company, a business entity, which operates on a commercial manner, to mainly generate income and value for its shareholder. In this case, PETRONAS' shareholder is the Government.

In 1974, when PETRONAS was set up, the Government gave PETRONAS RM10 million (peanuts, right?) as seed capital. From 1974 to 2007, PETRONAS made RM570 billion in accumulated profits, and returned to the Government a total of RM335.7 billion. That is about 65% of the profits. That means for every RM1 that PETRONAS makes, 65 sen goes back to the Government.

Last year, PETRONAS made a pre-tax profit of RM86.8 billion. The amount given back to the Government (in royalty, dividends, corporate income tax, petroleum products income tax and export duty) was RM52.3 billion. The rest of the profit was used to pay off minority interests and taxes in foreign countries (about RM7.8 billion - PETRONAS now operates in more than 30 countries), and the remaining RM26.7 billion was reinvested. The amount reinvested seems a lot, but the oil and gas industry is technology- and capital-intensive. Costs have gone up exponentially in the last couple of years. Previously, to drill a well, it cost about US$3 million; now it costs US$7 million. The use of rigs was US$200,000 a day a couple of years ago; now it costs US$600,000 a day.

A lot of people also do not realise that the amount returned by PETRONAS to the Government makes up 35% of the Government's total annual income, to be used by the Government for expenditures, development, operations, and yes, for the various subsidies. That means for every RM1 the Government makes, 35 sen is contributed by PETRONAS.

So, instead of asking what happens to PETRIONAS' money or profits, people should be questioning how the money paid by PETRONAS to the Government is allocated.


CRUDE EXPORTS & FUEL PRICES
4) A lot of people also ask, why Malaysia exports its crude oil. Shouldn't we just stop exporting and sell at cheaper prices to local refiners? If Malaysia is an oil exporting country, why can't we sell petrol or diesel at cheaper prices like other oil producing countries in the Middle East?

I guess I don't have to answer the first couple of questions. It's simple economics, and crude oil is a global commodity.

Why can't we sell petrol and diesel at lower prices like in the Middle East? Well, comparing Saudi Arabia and other big producers to Malaysia is like comparing kurma to durian, because these Middle Eastern countries have much, much, much bigger oil and gas reserves.

Malaysia has only 5.4 billion barrels of oil reserves, and about 89 trillion cubic feet of gas. Compare that to Saudi Arabia's 260 billion barrels of oil and 240 trillion cubic feet of gas.

Malaysia only produces 600,000 barrels per day of oil. Saudi Arabia produces 9 million barrels per day. At this rate, Saudi Arabia's crude oil sales revenue could amount to US$1.2 billion per day! At this rate, it can practically afford almost everything -- free education, healthcare, etc, and subsidies -- for its people.

But if we look at these countries closely, they have in the past few years started to come up with policies and strategies designed to prolong their reserves and diversify their income bases. In this sense, Malaysia (and PETRONAS) has had a good head start, as we have been doing this a long time.

Fuel prices in Malaysia is controlled by the Government based on a formula under the Automatic Pricing Mechanism introduced more than a couple of decades ago. It is under this mechanism that the complex calculation of prices is made, based on the actual cost of petrol or diesel, the operating costs, margin for dealers, margin for retail oil companies (including PETRONAS Dagangan Bhd) and the balancing number of duty or subsidy. No retail oil companies or dealers actually make money from the hike of the fuel prices. Oil companies pay for the products at market prices, but have to sell low, so the Government reimburses the difference -- thus subsidy.

Subsidy as a concept is OK as long as it benefits the really deserving segment of the population. But there has to be a limit to how much and how long the Government should bear and sustain subsidy. An environment where prices are kept artificially low indefinitely will not do anyone any good. That's why countries like Indonesia are more pro-active in removing subsidies. Even Vietnam (which is a socialist country, by the way) is selling fuel at market prices.


PETRONAS & TRANSPARENCY
5) I feel I also need to say something on the allegation that PETRONAS is not transparent in terms of its accounts, business transactions etc.

PETRONAS is first and foremost a company, operating under the rules and regulations of the authorities including the Registrar of Companies, and the Securities Commission and Bursa Malaysia for its listed four subsidiaries (PETRONAS Dagangan Bhd, PETRONAS Gas Bhd, MISC Bhd and KLCC Property Holdings Bhd.

PETRONAS the holding company produces annual reports which are made to whomever wants them, and are distributed to many parties and places; including to the library at the Parliament House for perusal and reading pleasure of all Yang Berhormat MPs (if they care to read). PETRONAS also makes the annual report available on its website, for those who bother to look. The accounts are duly audited.

The website also contains a lot of useful information, if people really care to find out. Although PETRONAS is not listed on Bursa Malaysia, for all intents and purposes, it could be considered a listed entity as its bonds and financial papers are traded overseas. This requires scrutiny from investors, and from rating agencies such as Standard & Poor and Moody's.


BOYCOTT PETRONAS?
6) The last time I checked, this is still a democratic country, where people are free to spend their money wherever they like.

For those who like to see more of the money that they spend go back to the local economy and benefiting their fellow Malaysians, perhaps they should consider sticking to local products or companies.

For those who like to see that the money they spend go back to foreign shareholders of the foreign companies overseas, they should continue buying foreign products.


FINAL WORD (FOR TODAY)
I'm sorry this is rather long, but I just have to convey it. I hope this would help some of you out there understand something. The oil and gas industry, apart from being very capital intensive, is also very complex and volatile. I'm learning new things almost every single day.


Appreciate if you could help to forward this response to as many contacts as possible to counter the subversive proposal out there.

Thank you.

Tan, Boon Hua
Geoscientist
Peninsular Malaysia Gas Fields Development Project
PETRONAS Carigali Sdn Bhd
Level 17, Tower 2
PETRONAS Twin Towers,
KLCC 50088 Kuala Lumpur
__________________________________________
Tel : +603 - 2331 9307
Fax : +603 - 2331 5633
E-mail : tan_boonhua@petronas.com.my

Mahathir's Crude Calculation Of Crude Oil

Filling up, a painful
experience

Hantu Laut

Subsidising the costs of petrol and diesel are no more feasible due to the high costs of crude oil. Continuing doing so would eventually take the nation to the road of insolvency.The price hike announced by the Prime Minister recently would also put a brake on smuggling that have rendered the nation massive economic losses.

Are we to believe all those hardball politics ? Many don't and it makes life difficult for Prime Minister Abdullah Ahmad Badawi.

People like Anwar Ibrahim, estranged former Prime Minister Mahathir Mohammad and Pakatan Rakyat have vested interests to demonise Prime Minister Abdullah Ahmad Badawi.They should not be looked upon as guardian angels.They are the demolition squads.

Anwar wanted Pakatan Rakyat to take over the government and he takes the post of prime minister.Mahathir has an axe to grind with Abdullah for the shelving of his vision of grandeur.Mukhriz Mahathir has lost his sense of balance and had become a chip of the old bloke.

Put any of them to run the government under the present situation you would see the same scenario.Their incessant barkings are now becoming a source of annoyance and an insult to the intelligentsia.

It is amusing to note that an article on comments made by Mahathir in his blog on the recent price hike of petrol and diesel appeared in Malaysiakini penned by one Syed Jaymal Zahiid. Malaysiakini appended a table on the price of petrol in other oil producing countries without doing an analysis and rendering of the different economic and social structures of those countries in comparison with Malaysia. The table from the said article is reproduced below:

Looking at the prices in the table any laymen would
immediately conclude that the Malaysian
government was wrong and could well afford to
give the people cheaper price for petrol and diesel because we are oil producing nation.The purpose of the table is to mislead those who has no grasp of economics.

The writer and Malaysiakini should have shown some semblance of responsibility to explain the purpose of the table.

Malaysia is not in the same league as those OPEC countries mentioned in the table. Crude oil is not the staple food(product) of Malaysia. Our domestic consumption of oil is almost 78% of our production capacity.We are a minuscule net exporter of crude oil.

Let's take Venezuela, which has the same population as Malaysia.It produces 2.8 million barrels per day and exports 2.2 million bbl per day and consumes only 599,000, bbl per day. Its economy depended solely on export of crude oil.Almost 90% of its export earnings came from export of crude. It has the lowest price for fuel oil among OPEC members, an unimaginable amount of RM0.16 per litre.

President Hugo Chavez is doing what Mahathir has been doing for the 22 years he was in power.Instead of making strong effort to raise to optimum level the income and living standards of the people, he pampered them with all kind of subsidies just to keep himself in power. The Malaysians' mindsets are now finely-tuned to the subsidy mentality.

Let us now take the other end of the spectrum, UAE (United Arab Emirates) with a small population of 4.6 millions.It produces 2.54 bbl/day and exports almost all of its premium crude.It imports around 137,000 bbl/day for part of its domestic consumptions. Although it could offer its people the cheapest price for petrol or even give it away free, it didn't.Its domestic price for petrol is MR1.19 per litre which is about the same price during Mahathir's time.

UAE is a forward looking nation and has diversified its economy to be not solely dependent on its crude oil export.Unlike Chavez of Venezuela, the rulers of UAE are fully secured in their seats and have successfully modernised and elevated the income level and living standards of the people.

Prime Minister wannabe Anwar Ibrahim said the price hike “wanton in size and callous in effect” and described the steepness in the price increase as unconscionable.

Anwar together with his former boss played equally damaging role to propagate a carrot and stick administration during his time in UMNO.He did nothing to stop the abuses when he was in the comfort zone.If you opposed the government you are seen as a security threat and are likely to be charged under the ISA. If you are a strong party supporter or a clever sycophant you would be rewarded with lucrative government contracts or given well-established public listed company on the platter that can make you an instant millionaire.

More shameful is Mahathir veiled attempt to mislead the people by saying that the government has the money to keep the fuel subsidy. He is either bad in mathematics or intentionally misrepresented Petronas profits.

For an ex prime minister who had 22 years experience in running the nation he should know the nitty-gritty of economics and interpretation of financial statements.As an adviser to Petronas such blatant disregard for facts and figures is inexcusable.

Writing in his blog he said“Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported. Our 250,000 barrels of export should earn us RM27 billion.

“But Petronas made a profit of well over RM70 billion, all of which belong to the government. I feel sure that maintaining the subsidy and gradually decreasing it would not hurt government finances,”

"Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.

Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).

But Petronas made a profit of well over RM70 billion, all of which belong to the Government.

By all accounts the Government is flushed with money"

Mahathir's above calculation is grossly misleading and most unexpected coming from someone like him, who is adviser to Petronas and one who knew the inner workings of government.The RM27 billion he calculated is gross sale not profit.

Below are details of the world prices of crude and the spot price of Malaysian Tapis for the period shown there in.Prices are not average but year end price.The annual average price would be much lower.

Year World Price US$ Malaysian Tapis US$ (in red)
-------------------------------------------------------------------------
Dec 2003 28.13 32.03
Dec 2004 33.05 38.41
Dec 2005 51.73 61.97
Dec 2006 55.95 65.57
Dec 2007 89.76 98.44
-----------------------
Jan 2008 85.53 93.69
Feb 2008 95.15 104.21
Mar 2008 99.32 107.88
Apr 2008 111.03 120.88
May 2008 126.06 138.43
---------------------------------------------------------------------------

The price reached US130. bbl only in May 2008.

Assuming we take the year end price between 2003 and 2007, the price for the period would be an untrue average of US$59.28 per barrel for Malaysian Tapis Spot.Let us assume the true average was US$50.00.

Assuming Petronas produced a daily average production of 600,000 bbl/day for the period, the annual gross sale of crude would be US$50 x 365 x 600,000. = US$10.5 billion before deducting operational costs, royalty to states and taxes.

Let us work out how much Petronas make between the period Mahathir left office and Abdullah took over the helm to the end of 2007.

Annual sale of crude US$10.5

Less:5% royalty to states .525
-----------
9.975

Assuming all other costs were
50% of net sales 4.987
------------
Net Profit to Petronas 4.987 x 3.20 = RM15.96

Petronas annual profit attributed to export of crude oil between 2003 to 2007 was only RM15.96 billion not RM27 billion as made out by Mahathir.Petronas also generates profits from it other operations especially its LNG and refined petroleum operations.Its other profit centres are from its overseas operations in other countries. In 2005 its revenue was US$44.3 billions and made a net profit of US$11.6 billions.

Petronas current crude production is in the region of 700,000 to 730,000 barrels per day.With the current high price of crude it probably can make RM60-70 billions from all its operations.

Malaysia's domestic consumption is in the region of 550,000 barrels a day and about 300,000 barrels of crude are imported to supplement the domestic needs .It is obvious from the amount of domestic consumption which is almost 78 % of the total crude production it would be unwise to fleece Petronas to continue with the subsidy. It would be likened to " kill the goose that lays the golden egg" if the government were irresponsible and continue the subsidy just to be popular with the people.

During Mahathir's time when the price of crude was much cheaper, averaging less than US$20. per barrel , Petronas profits had been even smaller. He kept Petronas accounts a closely guarded secret.

Why did Mahathir keeps the accounts of Petronas a secret? It is obvious he didn't want Malaysians to know how the money was spent and what are the reserves left after the many bail outs of failed projects and insolvent financial institutions and financing of his grandiose projects. Petronas is also wasting money on prestigious and non-revenue generating projects such as the Petronas Philharmonic Orchestra and bankrolling the F1 races. Now he claims the government is flushed with money.

The price of crude reached its peak at the end of May but have eased slightly since then.Will the price breached the US$200 mark this year?

Much depend on how the recession set in the United States and whether there would be decline in industrial outputs there, in China, India and other industrialised countries.A deep recession in the US could trigger off a chain reaction to other countries that have huge trades with it.A prolonged global recession would certainly bring down the price of crude and other commodities due to less demand.

With the recent price hike would Abdullah be in serious trouble of losing his job?

Much depend on the loyalty of the 150 BN members of parliament.If they stay with Abdullah his position would be unshakable. No reason for them no to, as by now, they would have realised the false claims by Anwar of the 30 MPs joining Pakatan Rakyat.Many dates given by Anwar and his cohort Jefferey Kitingan had passed without any sign of those frogs making an appearance.

Anwar appears unsure whether he should stand in a by-election against the might of the BN machinery and take the risk of being trashed.He kept saying he is not in a hurry.It's now obvious why he wanted to take over the government through the backdoor. To be on the safe side he would only stand in a by election after formation of the government under the Pakatan coalition.

The chance of a back door take-over seems to be fading away as time goes by.

If he stood in a by-election and lost that would be the end of him, his Pakatan Rakyat and his dream of becoming prime minister.

Abdullah needs massive image reconstruction if he wants to stay in power.His popularity rating has slid further down after the price hike.He is in dire need of a cabinet reshuffle and should get rid of those lazy ministers who have done him more harm than good.He should disband his 4th floor academicians.They are probably better suited to give lectures in our local universities than dishing out advices to the Prime Minister. Those kiddies from Oxford and Cambridge have not shown their mantle. If they had, the Prime Minister wouldn't be in such predicament.

The recent price increase has not been given serious thought and no campaign has been carried out to bring awareness to lessen the shock to the general public. The government should have used the mass media to advertise and dish the dirt out to the people on why the nation needs to reduce the subsidy, at least for six months before the date of implementation.It is obvious his cabinet ministers and public relation officers are not doing their jobs.

After asking the people to change their lifestyle and tighten their belts the government, likewise, must now go on an austerity drive starting with the Prime Minister leading the way by example.

Abdullah should cut down his overseas trip to the absolute minimum. Flying a big private jet is a very expensive affair, where possible he and his deputy should reduce the size of their entourage and used smaller jet or take commercial flights.

Ministers and civil servants should also curtail their overseas trips unless absolutely necessary. Many jaunts overseas had been known to be paid holidays under the guise of fact finding tours or working visits.

Ministers and senior civil servants should switch over to using smaller cars to conserve fuel and reduce government spending.

There are many more things that the government could do to send the message to the people that they are equally serious in cutting costs to reduce the burden on the people.

Abdullah taking this unpopular decision should be viewed positively.It means the man is not afraid of losing his job.

With the oppositions not showing any responsibility, inciting the people to take to the streets to demonstrate, will Abdullah reverses his decision again or send the water cannons and teargas ?

He has made his bed, he must now lie in it.

The simple-minded believe changing the government would change things for the better. Some will have the fortitude to accept the hard facts of life and bear the affliction with dignity while some will keep blaming the government for its uncaring attitude as theorised in Stanley Goh's "We need a more caring, innovative government" in Malaysiakini where he sees the government as the devil for all the hardship that some Malaysians may have to incur by the hike in prices of fuel oil.

Malaysians after many years of palliative care by the government now demand cheap fuel as of their rights and not as a privilege.



Than there are some publicity seeking activists who think going to the streets to vend their anger would scare the government and make them submit to their demands.

No government in their right mind would want to make unpopular decision unless they are forced by circumstances to do so.

Abdullah could have, to be popular, let the subsidy continue and hand over a bankrupt government to his successor or to the next government.

'Genocide Olympic' by whose version?

Hantu Laut

Janjaweed = Devils on Horseback"

Janjaweed. Literal translation = devils on horseback.

I have removed my link with "mia farrow.org". I don't agree with her recent action of asking the Western countries to boycott the Olympic Game in Beijing and to pressure the Chinese government to divest its economic activities in Sudan in relation to the Darfur crisis.

Her action is typical of American hegemonic policy, smack of double standard and without any basis other than trying to further American monopolistic control over the world crude oil trade.

I have been and still is a strong advocate of 'Save Darfur' campaign, as can be seen from my many previous posts, to bring awareness to the rest of the world of the genocide in Darfur.I appreciated her work in that respect.

As an individual she has done more than most countries and other individuals to bring to the world attention the human tragedy happening in Darfur and the Sudanese government participation in the genocide.

Even today as women,children and men are systematically slaughtered, raped and driven away from their land, the world stood still and did nothing to stop this execrable human tragedy.

The countries that have the resources to stop or lessen the atrocities would be America and her allies, Britain and the Western European countries.None have done anything significant to stop the Sudanese government from using the Janjaweed militia to commit such atrocities.

American and her allies, in defiance of UN Resolution, have conducted an illegal war on Afghanistan and Iraq that killed hundred of thousands of innocent people in the two countries that have no means of defending themselves against the military might of the Western alliance, but wouldn't lift a finger to exert military pressure on the Sudanese government that have already killed more than 500,000 of its own people.

I believe Mia Farrow had fallen victim to politicians with an agenda and being used by those in the corridors of power to try subvert China's rising economic power and growing importance as a global player in the world's market.

PetroChina, the biggest oil producer in Sudan is targeted by Western media and made as scapegoat for the atrocities.One of the major investor in PetroChina is Fidelity Investment, an American company.Despite months of engagement and thousands of complaints, Fidelity has thus far refused to accept any responsibility or divest its investment.Another American hypocrisy!

In February Steven Spielberg resigned from his role as artistic director of the Beijing Olympics declaring that in the face of genocide it "cannot be business as usual."Another American hypocrisy!

Below is an article written by Ronan Farrow and Mia Farrow and published in the Wall Street Journal on March 28,2007 calling the Beijing Olympic "Genocide Olympic".

The 'Genocide Olympics'

By RONAN FARROW and MIA FARROW

"One World, One Dream" is China's slogan for its 2008 Olympics. But there is one nightmare that China shouldn't be allowed to sweep under the rug. That nightmare is Darfur, where more than 400,000 people have been killed and more than two-and-a-half million driven from flaming villages by the Chinese-backed government of Sudan.

That so many corporate sponsors want the world to look away from that atrocity during the games is bad enough. But equally disappointing is the decision of artists like director Steven Spielberg -- who quietly visited China this month as he prepares to help stage the Olympic ceremonies -- to sanitize Beijing's image. Is Mr. Spielberg, who in 1994 founded the Shoah Foundation to record the testimony of survivors of the holocaust, aware that China is bankrolling Darfur's genocide?

China is pouring billions of dollars into Sudan. Beijing purchases an overwhelming majority of Sudan's annual oil exports and state-owned China National Petroleum Corp. -- an official partner of the upcoming Olympic Games -- owns the largest shares in each of Sudan's two major oil consortia. The Sudanese government uses as much as 80% of proceeds from those sales to fund its brutal Janjaweed proxy militia and purchase their instruments of destruction: bombers, assault helicopters, armored vehicles and small arms, most of them of Chinese manufacture. Airstrips constructed and operated by the Chinese have been used to launch bombing campaigns on villages. And China has used its veto power on the U.N. Security Council to repeatedly obstruct efforts by the U.S. and the U.K. to introduce peacekeepers to curtail the slaughter. Read more....

The article is lop-sided, grand-standing, sardonic and smell of a rat.

China is not my friend and it is neither the best example of preserver of human rights and what I wrote here might not make any difference to people like Mia Farrow and her conscience, but it's a revelation of the truth and the way I feel about this whole charade of sanctimoniousness and high moral principles.

Related articles:
China's Crude Conscience
Olympic Sponsor Report card. Most flunk.

ANWAR IBRAHIM:YOU ARE A BIG DISAPPOINTMENT !

Hantu Laut

Sometimes, intellectuality can go awry, incoherence and illogical. The law of improbability can end up as law of unintended consequences.

Anwar Ibrahim, a well-educated, intellectual and charismatic politician, adored by many young urban Malaysians for his oratorical skills and fiery delivery is beginning to drown in his own intelligence and unwittingly devour his own political future by self-inflicted injury.

I read with dismay and disappointment the promises he made on his campaign trail in Wangsa Maju, Bandar Tun Razak and Lembah Pantai.

The making of such audacious statements and impossible to implement promises is not reflective of an highly esteemed politician . The thin crowd from the Malay community is a telling sign of his declining popularity and skepticism that people have about his ability to mount a strong and united apposition, let alone form the next government.

I am sure many Malaysians would share my feeling of being insulted by such ludicrous promises. Some of the promises he made have actually done more harm than good. Those with enough intelligence would not be easily bought by such stupendous promises.

He said when he was finance minister for eight years he never raised the price of petrol. That's true, but what was the price of crude oil then ? The average price of crude for the 10-year period of the nineties was US$17.9 per barrel. Today the price of crude has reached US$102 per barrel, about six times more than when he was finance minister. What benchmark is he using to compare during his time and now ? Was it an intelligent comparison or just casting a lure to fish for votes, hoping gullible Malaysians would take the bait.

Another equally empty as an empty vessel was his promise of "I will abolish toll charges, fix minimum wages at RM1,500 and provide free education until university level," to the crowd at Wangsa Maju.

To implement all the promises he would need to use all the foreign reserves and also use Petronas as a cash cow.The country would be bankrupted before he finishes his term.

For an ex- finance minister to make such ridiculous promises it's obvious he has little respect for the intelligence of the people of this country.He was so besotted with the accolades he gets from the Western world on his academic achievements he has forgotten that Malaysians are not all that stupid either, to believe in his useless promises.

It is obvious that this empty vessel that makes the most noise is not likely to change the political landscape in this country. Lies and promises are not going to buy votes unless majority of Malaysians are thick in the head, which is what Anwar assumed us all to be. He is completely immersed in self-glorification and thinks Malaysia is one big bodohland.

With all the stupefyingly dull and empty promises he is making and at the rate he is going, PKR would have run out of support come this 8th March.