1. Fitch expects Petronas to go negative free-cash-flow 2. Canadians betting on Petronas stupidity

Here is some recap about Petronas from October last year by an Oilman called John Thompson:    

1. https://johnhthompson.wordpress.com/2015/10/18/malaysia-headed-for-significant-financial-shortfall-in-2016-oilman/

Malaysia headed for significant financial shortfall in 2016 – Oilman

OCTOBER 18, 2015 
JOHN H. THOMPSON

Petronas’ payout to Govt (dividends, taxes, royalty, export duties) to be down 50% for 2015 compared with RM73 billion in 2014.

contribution down 50% to RM35b for 2015

Petronas cut down capex and opex 

based on payout ratio of 50%
 

contribution will however, increase from 2016 onwards (if) oil stays above US$80 

2013 Petronas’ contribution to Govt RM67.6b,  2012 RM 80b

Petronas covers 1/3 of Govt’s annual income. 

2015 Petronas contributed RM26b, RM26b Tax, total RM52b

because of collapse of prices, only RM10b each, shortfall RM30b” Asia Sentinel..
The Straits Times:

Petronas gave dividend RM26b 2015 said can only give RM9b 2016. 

Where am I to go to make up the RM15 billion deficit,’ Najib said.

 
(This was Bugis' "tak tahu kira arithmetic" statement, RM26b - RM9b he got RM15b !!)

the PM is omitting significant information. 

taxes, royalties, export an additional RM26 billion.

If only RM9b in 2016, corresponding reduction in taxes, royalties, export duties.

Which means significantly > RM9b shortfall

More likely double that number, after reduction in taxes, duties, export taxes.

Or RM15b to RM18b shortfall. NOT RM9b shortfall.

roughly, Petronas dividends, taxes, duties and export taxes.

2012 : RM80 billion
2013 : RM67 billion
2014 : RM73 billion
2015 : RM52 billion
2016 : (Expected well below RM26 billion.)

Best case scenario for 2016…

RM9b dividends + RM18b taxes, duties, export taxes = RM27b 
So, to extrapolate the 2016 numbers:

2012 : RM80 billion
2013 : RM67 billion
2014 : RM73 billion
2015 : RM52 billion
2016 : RM27 billion (projected)

Buckle up, 2016 is going to be far bumpier financially than the PM is admitting. – October 18, 2015.

My comments : The next Budget speech is around the corner. 

Will Bugis reveal how much exactly was Petronas' contribution this past year? Because the numbers will be dismal. 

And what will be Bugis' projection of the numbers for the coming year 2017 ? 

Will he fudge his 'arithmetic' again? 26 - 9 = 15 ??

Here is another piece of bad news about Petronas:

2.  http://jakartaglobe.beritasatu.com/se-asia/canada-approves-27-billion-lng-complex-petronas-no-rush-start/ 

Canada Approves $27 Billion LNG Complex; Petronas in No Rush to Start

Petronas to review US$27.25b (LNG) project in Canada after Ottawa approves project 

analysts skeptical about project's prospects 
low gas prices and cost-cutting at oil giant

decision major test for Canada
energy industry suffering job losses 

need to look at 190 conditions and review project," Petronas CEO 

LNG prices dropped by > 1/3 in two years 

require much higher prices than forecast for next few years," said analyst 

Royal Dutch Shell, Chevron delayed projects, also in British Columbia.

go-ahead comes when Petronas going through cost-cutting 

Petronas cut spending by (US$12.1b) over next four years
profits slid 85% in April-June
outlook for industry "gloomy" well into 2017

slashed dividend commitment to govt by 1/3

"We expect Petronas to go free-cash-flow negative this financial year and next after meeting their capex and dividend requirements," said Fitch senior director Sajal Kishore.
unlikely to be much appetite for long-term LNG supplies for new projects.

Asian spot LNG prices dropped 70% since 2014. 

Energy consultancy FGE forecast glut to persist through 2023.

Reuters

My comments :  

The oil and gas industry in Canada is dead, like everywhere else. They are losing jobs by the thousands. 

That is why they have at last approved Petronas' gas project. They are keeping their fingers crossed that Petronas will be dumb enough to dump more money down the toilet - at least until the next elections in Canada !!  Super-duper liberal Trudeau was not born yesterday. 

Fitch expects Petronas to become free-cash-flow negative this year !!  Fitch is a major rating agency.  

Simply put free-cash-flow is simply money left over after paying for your immediate needs. 

They can pay their bills but there is no money to undertake new projects. But if it is negative for long, soon they will not be able to pay their bills either. 

The big question mark is HOW is Petronas going to give Bugis that RM17 billion (or RM15 billion) he was looking for for 2016 ?  Then what about 2017? 

Thats why my prediction is that they are going to make some somersaults with that upcoming Budget speech. 

Maybe India Rubber Man Arul Kanda will be called in to stretch it? Yo man, where is Arul Kanda? 

What was Petronas contribution (dividens, taxes etc) to the gomen this past year? Was it RM27 billion as per Oilman above?  That is a really low figure.

So what will it be for 2017?

Will they start printing money soon?

The Americans pulled it off because they are the world's largest economy. They are a democracy, they dont have stupidities like hoodood and Hippo's handbags. 

If Malaysia tries "quantitative easing"  aka printing money, then the Ringgit will go to RM5.00 against the USD in no time.  (The moron mamak may suggest this.)

What we are seeing is 13 years of "fools running the country".  It is bad enough that they are thieves. But do they have to be so stupid as well?