KL's Petronas urges ASEAN oil firms to join forces
KL's Petronas urges ASEAN oil firms to join forces
Agence France-Presse, Kuala Lumpur
The chief of Malaysian oil firm Petronas Monday urged national oil corporations (NOC) in Southeast Asia to form alliances to counter the influence of growing industry giants.
Mohamad Hassan Marican, Petronas president and chief executive, said there appeared to be a new round of consolidation among medium-sized multinationals hit by weak oil prices.
The recent acquisitions by United States oil producers Conoco and Amerada Hess highlighted this, he told the ASEAN Council on Petroleum Conference.
"There is greater urgency for NOCs, being niche players, to work even closer together to keep pace with the industry giants or risk being marginalized and forced to swallow the terms others will impose on us," he said.
"Maybe in the not too distant future... we may see the NOCs coming together, leading towards the formation of so-called regional supra-nationals and closer to us, an ASEAN super major."
Hassan said the global oil and gas industry would be reshaped by developments in the aftermath of the Sept. 11 terror attacks on the US.
"There are indications towards a more volatile Middle East, the cradle of oil for the world," he said, citing political tension and negative developments in oil-rich Saudi Arabia, Iran and Iraq.
The Association of Southeast Asian Nations (ASEAN) was also not spared of its share of political tensions and instability, and this would push up the cost of doing business, he said.
Over the short-term, Hassan said the global economic downturn and the forecast of warmer winter would create excess oil supply and further depress prices which have hit two-year lows since the US tragedy.
Under these circumstances, he said ASEAN NOCs must evolve into "more efficient and competitive bottom-line driven companies."
Hassan said Petronas was finalizing negotiations with Indonesia's Pertamina and PetroVietnam to form three-party joint- ventures in projects in their respective countries.