UK executives question KL petrol station move

UK executives question KL petrol station move

KUALA LUMPUR (Reuters): Malaysia's decision to stop giving
licenses to foreign oil companies to open new petrol stations in
the country could deter foreign direct investment, the head of a
British trade delegation said on Monday.

Last week's decision by the Malaysian cabinet not to issue
more licenses shocked foreign oil companies, which have been
aggressively expanding their retail operations in the country.

Market analysts said that apart from lost investment of the
oil firms, the government's move would jolt foreign investor
confidence at a time when domestic growth was slowing.

"It's that sort of restriction, that sort of introduction of a
policy, which obviously one has to decide (if) it's going to
spread into other areas of business," Jeremy Hanley, Chairman of
International Trade and Investment Missions told a news
conference.

"One doesn't want what you would call creeping nationalization
because that generally is a disincentive to foreign direct
investment," said Hanley, who was a minister in the British
Conservative government which lost power in 1997.

Hanley was part of a British delegation intent on building
bilateral trade from the $4.7 billion registered between the two
countries in 1999, with industries related to Malaysia's
extensive oil and gas reserves high on the group's agenda.

Malaysia's Domestic Trade and Consumer Affairs Minister
Muhyiddin Yassin was quoted by a local newspaper last week as
saying no petrol firms except state oil firm Petronas would now
be allowed to expand in the country.

He said the government would determine later plans to reduce
in stages foreign petrol companies' share of the market.

Royal Dutch/Shell, Exxon Mobil, BP Amoco, Caltex and Conoco

have a total of 2,024 petrol stations in the country, while
state oil firm Petronas has about 500.

Conoco, the newest player in Malaysia's petrol retail sector,
has said it planned to invest about one billion ringgit ($263
million) to build 150 petrol stations in the next 10 years.