Keep Sapura’s huge oil reserves out of foreign hands, says Najib

 

Sapura OMV, a subsidiary of Sapura Energy, operates oil fields in shallow Malaysian waters. (OMV pic)

PETALING JAYA: Former prime minister Najib Razak insists that the government offer a loan to Sapura Energy Bhd in order to save its oil reserves from falling into foreign hands before its full potential can be realised.

He said the company’s subsidiary, Sapura OMV, owned oil and gas reserves of 264 million barrels with a gross value of RM110.8 billion.

If the subsidiary is put up for sale, as is being speculated, Sapura’s joint venture partner OMV of Austria, would likely be the first choice buyer as it already holds a 50% stake in Sapura OMV with the remaining 50% held by Sapura Energy.

“If the remaining 50% stake in Sapura OMV is sold to solve the debt problem, the oil reserves will fall into foreign ownership before its full potential can be realised.

“This is why I urge the government to offer a loan to Sapura so that the oil reserves remain in Malaysian hands,” he said. Alternatively, the government could direct Petronas to take over ownership of Sapura Energy.

Sapura OMV operates oil fields in shallow Malaysian waters.

Najib said the sale of highly valuable long-term assets to solve short-term cash flow problems was unreasonable and detrimental.

Sapura Energy’s group chief executive officer, Anuar Taib was quoted earlier today as saying the company had begun discussing a restructuring of its RM10.3 billion loans from nine banks and is planning to sell some of its assets.

“Sapura Energy can no longer sustain its operations under its current debt load, which demands almost half a billion ringgit in interest payments annually. The faster we can restructure our debt, the better,” he was quoted as saying.

He said the group wanted to focus on its services, with less of a focus on exploration and production. “This means that assets in the latter category are likely to be up for sale,” the report said. - FMT