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Sounds very tiring. Keep it up!

I would really love to read about what you have to write :)

If there is one book you should read on the oil industry it is this "The Prize : The Epic Quest for Oil, Money & Power" by Daniel Yergin. The book won the Pulitzer Prize in 1992. Apart from explaining the industry (which is what you want to know), it will also provide you with the background and history as to why things are the way they are. It is available from Kinokuniya.

Jeff, good luck with the part " how the governments disclose their account receivables, have them audited".

You can only see such report if accrual accounting is used. Our government does not use that but instead transactions are recorded based on cash method of accounting which is common amongst commonwealth countries. I am aware they are migrating into accrual accounting but the migration takes time as it is really not an easy process. Only a few commonwealth countries have migrated into the new system even then they are not 100% accrual compliance.

I never work as a a government servant and I am not very familiar with public accounting practice but I think the office of the Auditor General would only
audit the report on the received amount.

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Maybe we need to clarify his statement? We may become a net importer of REFINED petroleum (my emphasis) but not necessarily for crude oil. The solution could be to build another refinery so that all our production can be channeled to domestic use.

While this would not solve the problem of the loss of foreign currency revenue, it may also mean we do not become a net importer.

We currently consume about 500-600,000 bbl/day and export 300,000 bbl/day
It stands to reason that this 300,000 bbl/day could be converted to local consumption
and be sufficient to last another 8 years i.e. 2015

Perhaps what Petronas should focus on is to frantically boost exploration activities. It will be costly
and will mean less money for the federal govt. to play with.

I'm not O&G expert, anybody else want to explore this further

Most developing countries are spending their Petroleum income like no tomorrow and as if the resources are infinite.

Some countries like Norway is a good example of how Petroluem money should be spend. Granted that the Norwegian are already a developed country but their regards for the future generation is worth to look at.

Well, considering the fact that Petronas is working to get oil in Darfur, Philippines and Central Java, I wouldn't worry so much.

I believe without Petronas support, we as a nation would really be in a ditch. Just how much really is Petronas supporting us in various ways eg subsidies that is given to say the national power company, bail outs (Proton, Carrian Case) etc, but on the flip side, just look at our neighbours, they have excellent toll free roads but pays international pump prices. Jeff, please do a comparative studies on these. Do pin point areas where we can be competitive. Rgds

Jeff,

Isn't there an oil reserve fund called Kumpulan Wang Amanah Negara? Maybe you can do some investigating and tell us more about this?

Our tapis crude gets better price so it's exported. Increasing refining capacity to keep tapis crude local will cost to build refinery whose cost may not be recoverable once local oil is depleted, especially in a global market awash with refineries; also the loss of not just forex but oil revenue from export. The game reduces to how much can be saved from using local oil domestically against increased revenue from selling it and let locals buy imported oil at lower prices? Given the peak oil situation and present escalating prices, the impact of being a net oil importer may hit harder soon - especially when it is the govt which draws fory percent of its spending power from oil, and supposedly hinges achieving 2020 on the two projects announced under 9MP.

Secondly when Petronas moves from miner in Malaysia to PSC (like Exxon, Mobil etc) in Darfur, Russia etc, the returns will be to service provider not owner, so expect that to be lower, IF in the first place the sinks gush, and that's not entirely certain. And if that's already certain, very high upfront prices would have been paid for the rights to mine on behalf of those respective govts.

JEFF OOI says: Precisely Neil. This is exactly what I am learning in the classroom this one week. The resource person, Willy H Olsen is most illuminating and insightful. He is the advisor to INTSOK, Norwegian Oil and Gas Foundation, and a member of the Governing Board, Revenue Watch Institute. I will share what I have learnt later.

Sum up: with PFI unknown and probably another EPU miscalculation, with oil local reducing, oil foreign a risky proposition at best, and national economy dependent almost to half (forty and increasing) in the coming years, and the local wealth base halfway out of the country because of policies etc, what will be the national cashflow?

If cashflow no good, cost of loans will be high since ranking goes down and syndicated loans demand higher repayment interest.

At the society level, a lot of households are living on credit; and the recent HR headhunters' survey still put 'sales' jobs at the top in the coming years - so where's the valueadd from things like products design and markets creation?

In this country, feeling secure is like holding a tasty icecream cone on a hot putrajaya tarmac in the sunny afternoon.

We have vast amount of LNG. In bintulu, shell MDS plant is the first in the world to convert LNG into refined petroluem products. Shell V-power petrol and diesel is one of its product. It is colourless and odourless, just like water.
Whatever happened to Invetqjaya, with its hydrogen fuel cells. If mahathir had faith with this libyan and offered RM300-400million government loan, and his fuel cell research is lying somewhere in the factory rotting away, should't we come to our senses and offer the place to some research university? Hydrogen seems to be the fuel of the future and it could be produce by extracting from LNG (wasteful) or from water (electrolysis consume vast amount of energy).