From Bernama – Kelantan Oil Royalty Issue

Taken from Bernama, dateline August 1:

KOTA BAHARU, Aug 1 (Bernama) — The federal government is looking into the question of oil royalty for Kelantan, Prime Minister Datuk Seri Najib Tun Razak said Saturday.

He said the matter was still under study because of overlapping areas in the vicinity of the oil platform.

“When the study has been completed, I will send a representative to convey the result of the study to the state government,” he told reporters after opening the Kota Baharu Umno Division delegates meeting, here.

Kelantan is seeking RM1 billion in oil royalty from the federal government, claiming that the money constituted five per cent of the earnings from petroleum and liquefied natural gas extracted from offshore Kelantan since 2004 as per a report of the Statistics Department.

What ‘overlapping areas’ are being referred to? I know that the Joint Development Area is part of Kelantan costal waters, but you would think division of profits would have already been sorted out with neighbouring governments. If not, I pity CHOC.

And which oil platform we talking about? Isn’t it a gas platform that’s out there. Chakerawala, anyone? Or maybe they are talking about oil equivalent barrels (oeb)?

Other articles on this are here and here.

From Business Times – Malaysia uses 5pc less natural gas in Feb

Dateline 2009-03-17 (story link here):

MALAYSIA’S consumption of natural gas declined about 5 per cent last month from a year earlier because of falling demand from power plants, a Petroliam Nasional Bhd official said.

The country burned 2 billion cubic feet a day last year, and the power industry accounts for two-thirds of the usage, Ezhar Jaafar, senior manager for gas business at the state oil and gas company, said at the Gas Asia conference in Kuala Lumpur today.

“The power sector is not taking as much because of the economic slowdown,” Ezhar said.

Malaysia’s slowing economy has curbed the consumption of electricity as offices and factories close down. Analysts at Citigroup Inc and Standard Chartered Plc expect Malaysia to join neighbouring Singapore in a recession this year, with Nomura Holdings Inc predicting a full-year contraction of as much as 4 per cent.Malaysia may have to consider importing gas or liquefied natural gas to meet domestic demand when economic growth picks up, Ezhar said.

Demand for LNG in Asia may drop 7 per cent to 10 per cent this year as countries including Japan and South Korea reduce cargo purchases, Ezhar said.

The cut in long-term contract volumes may force some producers to sell the cargoes at “cheap” prices, he said, without identifying any supplier.

The world’s three biggest LNG producers are Qatar, Malaysia and Indonesia.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by ship to destinations not connected by pipeline. It’s turned back into gas for distribution to power plants and other buyers. – Bloomberg

You can subscribe to an online version of the paper at the Bluehyppo site, follow links to e-browse.

Gas Price Review

Taken from The Star, Dateline 2008-01-15:

The (Malaysian) Cabinet has agreed for the price of gas sold to the energy sector to be reviewed earlier than the scheduled revision in June.

The Star - Gas Price Review

But, during the last gas price review, when the price of gas went supposed to go up, nothing happened. Must be that laissez faire mechanism called political economics (my grouse for the the day).

You can subscribe to an online version of the paper at the Bluehyppo site, follow links to e-browse.

Thoughts on the Price of Petrol

As of today (11th Dec, 2008), the price of petrol in Malaysia is RM1.90/liter. Even though this seems good in the face of things, I can’t help but wonder on some topics:

• Did you notice that the price of natural gas hasn’t changed? If you are going to follow market forces in pricing petrol, why not gas? Is it because gas consumers has more political clout and more to lose if the current low market price for gas goes up? Or is it because the average man in his Produa doesn’t know about it.

• For comparison, the EIA site has the price of natural gas as USD $5.686 per MMBtu for January 2009. From Gas Malaysia’s tariff site, the cost of gas ranges from RM19.18/mmBtu to RM28.29/mmBtu. That’s $5.38 to $7.93, converted.

• The low petrol price means that the people’s focus moves away from  improvement of public conveniences, and back towards getting to work in the relative comfort of private vehicles. I believe that engineers, esp the Institution of Engineers, could have done more faster to improve the lot of the commuter, and recruit more converts to communal travel.

• Low petrol prices means low crude oil prices, which puts my job in jeopardy. But hey, nothing I can do about it except be more diligent in seeking worthwhile jobs.

Article ‘Kenapa BN Mahu Sangat Rampas Kelantan’ – Take 3

Continuing my expansion of the above article, I thought I would comment on the map that is displayed in the article.

First thing I would like to point out is that the author says the green and blue line represents an oil transportation system.

At the moment, peninsular Malaysia has no oil transportation system. And there are no plans to have a consumer level transportation system (i.e. from refinery to distribution centre, to being piped into petrol stations and the like).

However, the blue line can be said to represent the Peninsular Gas Utilization (PGU) routing. To quote from the website:

“Through its listed subsidiary PETRONAS Gas Bhd, PETRONAS has since 1984 been implementing the three-phase Peninsular Gas Utilisation (PGU) project, an infrastructure development project to process and transmit natural gas fed from the fields offshore Terengganu to end-users in the power, industrial and commercial sectors. The entire PGU system now spans over 1,700km, comprising main gas transmission pipelines, supply pipelines and laterals.”

That covers the blue pill. Let’s chat about the green pill some other time.

It’s official – TCOT handover from Exxon to PCSB

On Tues, 25th March, 2008, the staff at Terengganu Crude Oil Terminal (TCOT) were informed that TCOT and the Onshore Slug Catcher (OSC) will be changing operatorship. By 1st quarter 2009, PETRONAS Carigali Sdn Bhd (PCSB) will be operating TCOT and OSC. ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI) staff currently working at the two locations will be offered a voluntary separation scheme (VSS).

TCOT and OSC are located in the picturesque town of Kertih, Terengganu, Malaysia. TCOT is the terminal for all the offshore oil pipelines, whereas OSC, together with the PCSB operated Onshore Gas Terminal (OGT) are the collection points for offshore gas.

Carigali will send a handover team over on 1st April 2008, with the intention to be ready for full transfer of operatorship by 31st August, 2008.

Article ‘Kenapa BN Mahu Sangat Rampas Kelantan’ – Take 2

Continuing my expansion of the above article, I thought I would list down the operators and comments of the acreage listed.

• Blok A18 - as the original author says, the acreage is operated by the Carigali Hess Operating Company (CHOCas its known to friends). It’s located in the Malaysia Thailand Joint Development Area (JDA)
• Blok B17 – the PSC for this area is PETRONAS Carigali (JDA) Sdn Bhd, also in the JDA.
• Block C19 – the PSC for this area is Carigali-PTTEP International Operating Company (CPOC), also in the JDA.
• PM3 – operated by Talisman (Malaysia) Ltd.
• Sub-Blok Ular – operated by PETRONAS Carigali Sdn Bhd (PCSB).
• PM301 & PM302 – CS Mutiara, though I’m not sure if they have had to relinquish the acerage yet. It’s interesting to note that this aceragetouches the Kelantanese shoreline.
• PM303 – Shell, PSC awarded in 1999, though yet to produce.
• PM311 & 312 – joint venture between Murphy Peninsular Malaysia Oil Co Ltdand PCSB, yet to produce.

So, of the fields listed by the author, 3 are in the JDA, one is in Kelantanese waters, and the rest are in Terengganu waters.

It’s interesting to note that we do not have a JDA for disputed resources between Malaysia, Indonesia and Brunei. Would that have reduced the amount of hydrocarbons that could be claimed by Sabah and Sarawak?

Malaysian elections equal no shutdown work?

Petronas has asked its Production Sharing Contractors (PSC) to defer any shutdown work that might result in gas production cutback till after the Malaysian elections on March 8th, 2008. Is there a concern that a gas shortfall could result in an blackout prior to the elections?

Peninsular Malaysia’s raw gas supply comes from offshore gas fields. The gas is collected into two gas networks and sent to either the Onshore Gas Terminal (OGT) or Onshore Slug Catcher (OSC) in Kertih, Terengganu on the Peninsular’s east coast.

Trivia: Fresh, raw oysters are served in Kertih!