It was Cronies that has been greased
In Malaysiakini, Ronin Cyber, wrote, “Oil Expert need greasing” It has provided many interesting facts about oil commodity industry and its terminologies.
It would be more interesting if the writer could provide the readers of Malaysiakini with more facts and figures to enhance the information thirsty ignorance readers who rely on Malaysiakini on the only news that matters where letters from readers formed a very important component of valuable information.
There are many things that Ronin Cyber needs to verify prior to pen the sharp criticism on the Statement of Dato Seri Lim Kheng Yaik. Public must recognized the facts that the LNG energy purchase agreement was fixed ay RM 6.40 per mbtu it will only expired by the end of 2005, thus not immediately affected by the current energy price escalation.
It is a very common public knowledge that LNG contract normally will run for at least fifteen years while the standard agreement would be twenty years. The new contract that Pertamina signed with CNOOC for Fujian province, China , in late last year was fixed at about US 2.00 per mbtu.
The current Oil market experience such uncertainties were due to the following reasons:
1. Shortage of world crude oil supply. Nigeria, the Africa biggest crude oil producer (world second biggest crude Oil exporter) had a civil war that causes the sharp drop of its production.
2. The termination of the cheap Iraq Oil for food program that supply the world abundantly with non OPEC Quota production and black market crude oil
3. Speculation of the Crude oil in the commodity future market.
4. Winter in northern hemisphere would create bigger demand for oil products for heating purposes.
The non economic reason of such escalations of the Crude Oil is normally due to the US presidential election. It commands the similar reason of why Malaysia Stock market develops the Bull Run during the election year.
In the power sector, TNB had absorbed more than 45% excess capacity produce by the entire Independent power producer. This excess power supply is a worth more than RM six billion a year since 1999 or more than RM 34 billion total
For the last five years TNB had absorb more than RM 30 billion of unsold power from IPP. Why should TNB bear all the social burden and unfair trade practices? It is also publicly listed company that is accountable to its share holders! If TNB is to be operated as an independent Public company without the interference of the corrupted regimes, it would have paid off its RM 32 billion debts!
The increase in demand for the power is around 1% above the GDP of a country. The current Malaysia Power generating capacity is about 15,838 MW. At the height of our sudden surge of demand Malaysia only need about 10,000 MW generating capacity.
Dr. Mahathir and his Old goats in Economic Planning Units have further approved 2200 MW to Malakoff and another 2000 MW to Jimmah Power. The RM 9.5 billion Bakun projects are still facing the uncertainty of where to sell the excess capacity while Syed Mokhtar’s Black Mailing exercise to demand EPF to fund his purchase of Bakun and sales of Power at less than RM 0.08 cent perkwh or RM 0.05 cents below the price sold to SESCO.
In the midst of wonder years, Malaysia could have been overlooks the economic mal practices by Mahathir administration, but in the lean year under Pak Lah, one should really count every cent to ensure the sustainability of the overall economy.
It is ashamed that Malaysia Economic Action Council, (MEAC) and its panelists are only good for academic papers rather than the practical economic management of our oil resources.
I believe what Kheng Yaik tried to convey to the Public is the important of optimization of resources utilization and revision of the IPP power purchase contract because Malaysia Do not owes these cronies their wind fall profits!