KUALA LUMPUR : Putrajaya denied today (Oct 27) Opposition Leader Datuk Seri Anwar Ibrahim’s claim that national oil firm Petronas was forced to sell off its assets in Azerbaijan due to pressure to pay tens of billions in dividends to the government this year.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed told Parliament’s Special Chamber that the Petronas management had decided on the sale as far back as 2019, as part of its continuous business review.
“The decision reached by Petronas is in line with the firm’s strategy for its portfolios to be more focused, competitive and sustainable. Assets in Azerbaijan had been identified as a candidate for exit since 2019,” Mustapa, MP for Jeli, told the chamber.
The sale was only concluded this year. Petronas said in a statement on October 8 that the company has reached an agreement with LUKOIL for the proposed sale of Petronas’ Azerbaijan business interests, which included its entire stake in the Shah Deniz natural gas project in the Azerbaijan sector of the Caspian Sea for US$2.25 billion (RM9.41 billion).
The firm stated the asset sale was part of a continuous review of its business portfolio “to ensure a better fit in its growth strategy in the increasingly evolving energy landscape.”
Anwar previously alleged that the sale was a result of government pressure for Petronas to pay a higher dividend this year. In a motion to debate the matter, the Port Dickson MP claimed Putrajaya had asked for a dividend of RM25 billion.
The higher dividend payment would be “detrimental” to the national oil company’s finances since Petronas “has been in a deficit” since 2018, he argued.
“I would like to discuss the sale of Petronas Azerbaijan assets valued at RM10 billion following pressure from the government that the firm raise the dividend payment to RM25 billion to the government for 2021,” he said.
“The dividend payment of RM25 billion to the government is detrimental to the future of Petronas.”
Petronas’ dividend payment for 2021, approved by its board of directors in February based on the firm’s 2020 performance, totaled RM18 billion, according to Mustapa.
The board subsequently approved an additional RM7 billion payment in July. The minister said the decision was reached after taking into account the improving global oil market. Brent price had averaged US$69 (about RM286) per barrel for the first seven months of 2021.
“The approval of sale of the Azerbaijan assets was decided by the board of directors of Petronas’ subsidiary Petronas International Corporation Ltd. on October 1,” Mustapa concluded.
Therefore, the sale of assets has nothing at all to do with the payment of dividend to the government. Hence we reject the assumption by Port Dickson (Anwar).”
This year’s dividend from oil sales was much lower than 2020, the minister added. It had paid the government a dividend of RM34 billion ringgit for 2020, despite posting losses in the second quarter.
By : SYED JAYMAL ZAHIID – MALAY MAIL