Wednesday, October 05, 2016

Does It Matter That The BC Liberal Government Denied Petronas' Intention To Sell PNWLNG Before...

...Petronas Did?

It began, in the wake of the FedLib condition-laden approval of Petronas' $27 (or is it $36?) billion dollar Pacific Northwest Liquid Natural Gas project, with a report from Reuters that the Malaysian oil and gas company was considering selling the thing, off.

Here is the lede from that Reuters' piece:

Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27 billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week...

Soon thereafter the pushback began. Coming a bit late to that party, the first bit I saw was a short piece from the Canadian Press published on the MoCo site last Saturday morning, October 1st, that began thusly:

Malaysian state-owned oil firm Petronas says it's not considering selling its stake in a proposed multibillion-dollar liquefied natural gas export terminal in B.C.

The company issued a statement yesterday saying it "categorically denies" allegations made in a news report that selling its stake in the Pacific NorthWest LNG project was up for consideration...

 Which is all fine and good, as far as it goes.

But then Grant G., who has been indefatigable in digging into to all things LNG here in British Columbia, mentioned that he couldn't find the press release from Petronas  pertaining to this matter.

So I started sniffing around further and saw a most interesting piece written by Martin MacMahon acknowledging an assist form the CP that had been published on the CKWX 1130 site the day BEFORE, Friday Sept 30th:

What was interesting about Mr. MacMahon's piece?

Well, firstly, there was this:

Petronas has told the province it has no plans to sell its stake in the Pacific Northwest LNG project.

This follows a report from Reuters indicating the Malaysian energy company is looking to get out of the $36-billion proposal.

Petronas has reassured the province the report isn’t true, according to the ministry of natural gas, responding to our questions after the release of this report citing three anonymous sources...

And, secondly, right at the end, there was this:

...The provincial government says it expected Petronas to issue a statement...

Gosh, that's interesting,  I thought.

It was almost as if our very fine NatGas Ministry was the tail wagging the Petronasian dog.

So I contacted Mr. MacMahon via the Twittmachine Saturday evening and he told me that it was he who had asked the provincial government's NatGas Ministry about the story (i.e. not the other way around).

Now, as Grant G noted, what Mr. MacMahon had to say was backed by the fact that the NatGas Minister himself, Mr. Rich Coleman was on CKNW's 1:00pm Friday newscast saying that Petronas had told him they were not planning to sell.


Given all that I also asked Mr. MacMahon, if he himself had actually seen a statement from Petronas to that effect?

Mr. MacMahon responded that it was his colleague Renee Bernard at WX who had written the follow-up story on Petronas' denial statement that was published late Friday night. Here are the pertinent bits from Ms. Bernard's story:

The Malaysian state-owned oil firm Petronas denies a report that the company was considering selling its stake in a multibillion-dollar liquefied natural gas project in BC.

A statement from Petronas says it remains committed to working with its partners following a conditional approval from the federal government for the proposed Pacific NorthWest LNG project...


...BC’s Ministry of Natural Gas Development previously said in an email that it spoke with Petronas and was reassured about the company’s involvement in the proposed LNG export terminal...

After reading that I attempted to call Ms. Bernard, also via the Twittmachine, to ask her if she had actually seen Petronas statement of denial. She didn't get back to me.

At the same time I went back and asked Mr. MacMahon if he, himself, had contacted Petronas. At this point Mr. MacMahon also stopped responding.


Where was this post NatGas Ministry statement of denial from Petronas that Ms. Bernard and numerous other writers of from numerous other proMedia, referred to in the avalanche of no sale stories that followed?

Was it on the Petronas website?

Nope (and it still isn't, although a statement of glee re: the  FedLib approval sure as heckfire is).

But, while casting around on Saturday I did notice the following, also on the Twittmachine:


Who posted this on Twitter?

Turns out it was a very fine local fellow named Spencer Sproule whose name Grant G. remembered from a two year old Vaughn Palmer article in the VSun:

..."Petronas and its partners in the Pacific Northwest LNG project continue to review the economic viability of the project which, in time of declining oil prices, presents challenges," said the release issued over the name of Spencer Sproule, the former B.C. Liberal staffer now employed as senior adviser for corporate affairs on the project...

And when David Schrek asked the good Mr. Sproule on Saturday why, if the denial statement was authentic, it was not on the Petronas website, Mr. Sproule responded that it was issued by Petronas Media Relations and that it was sent to 'any media that requested it'.

Imagine that!



Coming back to the question in the header to this post...

Does it actually matter that it was the BC Liberal government and Rich Coleman who got out in front of the denial story in a  fast and furious fashion that was then back-ended by at least one very fine local fellow with PNWLNG and BCL ties?


Consider this.

Who loses if Petronas sells?

Or, put another way, who really loses prior to May 2017 (and might have a really hard time 're-negotiating') if there is even a reasonable public perception that Petronas might sell?

I'll be back to explore those questions later but, in the meantime, feel free to fire away in the comments.



Grant G said...

Still no official press release from Petronas...still no statement from Petrtonas CEO..nuttin!.

There has been though....A wave of pro-LNG spin from....From energy executives and industry spindoctors..

First there was this in the Financial Post

"CALGARY — Global markets for LNG could return to balance as early as 2021, ushering in a “second wave” of opportunity for developers of the supercooled gas on Canada’s West Coast, commodities analyst Martin King said."

Hmm, but who is Martin King? is he an independent analyist, no, is he a CEOI of a big energy company? no...Who is he..

Mr. King went on to say this..


“There’s still a window open,” said King, the director of institutional research at GMP FirstEnergy.


Who is GMP First energy, who did the Financial Post go to for the spin..?

"In September 2016, GMP Securities combined its energy businesses with Calgary-based FirstEnergy Capital to create GMP FirstEnergy, a leading independent global energy investment bank.....

GMP FirstEnergy's highly experienced professional are solely dedicated to fostering global energy development. As such, the franchise plays a prominent role in the energy sector providing focused financial, advisory and investment services to a broad range of corporate clients and institutional investors worldwide"


So, a newly created energy project investment/lending outfit is trumpeting a second-wave...Rose-coloured glasses and too much LNG w(h)ine

Grant G said...

And I love this story..


A liquefied natural gas tanker plying the waters of the Mediterranean has created a guessing game for energy traders.

The Maran Gas Delphi has taken a meandering course after loading up on U.S. shale gas a month ago at Cheniere Energy Inc.’s Sabine Pass export terminal in Louisiana. The ship anchored off the coast of Greece for several days, prompting speculation that it would deliver its supplies to a port in the region. Instead, the tanker is now off the coast of Egypt approaching the Red Sea, raising the prospect that it may instead travel to the Middle East or Southeast Asia.

The winding track of the Maran Gas Delphi is a testament to how a gas glut fed by surging production from countries including the U.S. and Australia is complicating global trade of the fuel. The rise of so-called homeless LNG, or supplies not already committed to customers, is confounding efforts by traders and analysts to get a grasp of the market and make bets.
“It’s a bit of a mystery,” Jason Feer, head of business intelligence at ship broker Poten & Partners in Houston, said of the Maran Gas Delphi. “Normally LNG logistics are pretty well-rehearsed, and having an LNG carrier cooling its heels is expensive.”


What you have is orphened LNG cargoes with no home, no buyers....can you glut glut glut..

Grant G said...

And this showed up today...Black Press..on op-ed..


The following is an opinion-editorial written by Minister of Natural Gas Development Rich Coleman:

This week, the door opened for British Columbia’s natural gas industry to go global when the federal government provided approval for Pacific NorthWest LNG. The proposal represents up to $36 billion in new investments, thousands of jobs and an unprecedented economic boon for British Columbia’s future.

The advantages of building this new industry are substantial and it will help us build a stronger economy so we can afford the services British Columbians depend on, like health care, education and housing.

The benefits aren’t limited to our economy. Natural gas is the world’s cleanest burning fossil fuel and shipping it to Asia provides our province with an opportunity to lower greenhouse gas emission on a global scale.

Those are facts. Pacific NorthWest LNG remains committed to building an LNG project that will benefit all of us and the stories you hear opposing the facility are generally misleading and often inaccurate.

The environment is, and always will be, protected. Pacific NorthWest LNG’s approval was granted with 190 legally binding conditions following years of collaboration, scientific research, and stringent environmental reviews. They protect marine life and limit greenhouse gas emissions.

They also complement the provincial government’s work to be a climate leader.

In fact, British Columbia is the first jurisdiction in Canada to impose a carbon tax and we are the only place, anywhere, with regulations to have the cleanest LNG facilities in the world. Our environment is a priority. These facts speak for themselves.

Perhaps most disheartening is the actions of critics purporting to speak on behalf of the people living in or near Prince Rupert where the project, once constructed, would reside. This is where the truth really gets lost.

The prospects of a stronger future are most evident in First Nations communities, where the next generation will get a chance to learn a trade, find employment and create a brighter future for their families.

The Lax Kw’alaams First Nations have voted to support ongoing collaboration. As well, the Metlakatla have voiced support for the project. The First Nations LNG Alliance has also publicly supported the government’s decision, showcasing how meaningful consultation and engagement has led to positive results when all parties are involved.

Of course there is more work to be done. LNG is still a long-term commitment. We understand Pacific NorthWest LNG will now take the time to assess the conditions that accompanied the federal approval and review every element of their proposal to determine the best path forward.

As we eagerly await the result of this process, the provincial government will continue to work with the proponent, the federal government, First Nations and other stakeholders to ensure Pacific NorthWest LNG has the opportunity to deliver on its full potential - to make a positive difference for the thousands of people who rely on the natural gas industry now and into the future.

Now, more than ever, we know Pacific NorthWest LNG can be an active, responsible player in British Columbia’s economy. The benefits are indisputable and far-reaching. For people in northern B.C., and specifically those who have been on the periphery of economic development for far too long, building Pacific NorthWest LNG opens the door to a new, stronger future.


An op-ed piece by Rich Coleman?

If this project is a GO..why after 5 years of BC Liberal LNG blather does Rich Coleman need to do an op-ed to make his case?

Who is Rich Coleman trying to convince..

And still, no official Petronas press release..

sd said...

I have this vision in my head of crusty and jowly fighting over space on the lng life boat as the ship goes down.

Lew said...

Strange that Mr. Coleman didn't mention in his op-ed that he knows what number Petronas has to get to in order to make the project viable, and he's going to Malaysia in October to tighten the numbers on the existing agreement between the BC government and Petronas. That's what he said in a very recent BIV article by Bob Mackin. If he's not going as advertised, what changed?

There's something very unseemly about a desperate politician trying to save face running around with our credit card after a major state-owned international player that has a duty only to its partners' shareholders and its foreign political masters.

The people Mr. Coleman is "negotiating" with on our behalf will suffer very serious consequences if they don't achieve a sweetheart deal with guaranteed success. He runs no similar risk. We should rightly be worried, and demanding more transparency here in place of coded BS in a tweet on social media that looks like it was co-authored by Sproule and Coleman.

Anonymous said...

Take a look under your bed. There might be an LNG developer hiding there.

Lew said...

Anon @1:27:

They're hiding somewhere. And it isn't in BC.

If you happen to find one, let Christy or Rich know. They want to pay them to take our gas...

Tom Kirkman said...

(Part 1)

Over here in Malaysia, local media has been largely quiet about this. Simpky parroting verbatim the Reuters article.

And dead silence from Petronas regarding any decision to move forward with PNW LNG, or shelve it for now, or try to sell off assets.

Ok, now pay attention to this story below from May 2016. It is relevant to the current situation of any potential Petronas asset sale of PNW LNG.

In May, a certain person (who shall remain un-named) raised a ruckus behind the scenes to block the potential sale of Petronas assets to Russia.

“We will take all legal steps to voice our loudest and most vociferous opposition to the Federal Government, and take legal action through all the relevant international bodies, including the United Nations and the International Court of Justice (ICJ).”

The lawmaker, while not ruling out that the national oil corporation may be facing a cash crunch, ventured that there may be various “legal implications” if Petronas had to eventually sell off parts of the oil and gas industry in Sabah and Sarawak. “Selling off oil rigs in the waters of the two Borneo nations would mean infringing on their territorial rights.”

“The Federal Government and/or Petronas have absolutely no right to do this.”

Tom Kirkman said...

(Part 2)

Here is a backup of some of ruckus created to block any potential Petronas asset sale to Russia:

Note that the intial news was reported by Tass, an official news organ of Russia. The Russian Energy Minister never retracted or denied his statement that Russia was in taljs to acquire Petronas assets. Only Petronas denied the asset sale discussions.

Here is Petronas press release:’-ASSETS-AND-STAKE.aspx


PETRONAS refers to a number of recent press reports originating from Russia on purported discussions for the disposal of specific PETRONAS “assets” and “stake”.

We wish to clarify that PETRONAS has not been and is currently not in discussions with any Russian party for the abovementioned purpose.

Issued by

Media Relations
Group Strategic Communications

Tom Kirkman said...

(Part 3)

It took 5 days for Petronas to issue that press release, denying any potential asset sale to Russia, or any discussion about a potential asset sale to Russia.

So, if Petronas has no intention of considering selling PNW LNG assets, expect a formal press release from Petronas.

Bear in mind, Petronas flatly denied being in discussions with Russia's Energy Minister, even after Russia's Energy Minister stated publicly that Russia *did indeed* have discussions.

Since I'm not that familiar with Canadian politics, I'll leave it to local Canadians to extrapolate... how Petronas is said to deny considering an asset sale of PNW LNG assets, when Petronas has so far issued no such statement.

Tom Kirkman said...

(Part 5)

(Apologies for my typos so far, it's 5 am here, just having my coffee this morning.)

Here is one of the articles from Tass:

MOSCOW, May 20. /TASS/. Russia may increase supplies of oil and oil products to Asia-Pacific nations 1.8-2.2 times by 2035, Energy Minister Alexander Novak said on Friday.

Zarubezhneft may acquire assets of Malaysia’s Petronas
According to Novak, Russia's Zarubezhneft is exploring the possibility of acquiring the assets of the Malaysian Petronas company.
"Also, Zarubezhneft shows interest in studying the assets of Petronas. The parties are holding consultations about it," he said.

Novak said that Zarubezhneft is in talks on entering projects in Malaysia.
"As for Zarubezhneft they are studying opportunities to enter projects in Malaysia. Zarubezhneft has a lot of experience to enhance the effectiveness of existing fields, and offers its services and participation," Novak said.
Malaysian state oil and gas corporation Petronas is authorized to develop and produce oil and natural gas throughout the territory of that Asian country. Petronas is one of the largest energy corporations in Southeast Asia. The company employs about 40,000 people.

Tom Kirkman said...

(Part 6)

So, bottom line, unless and until a formal statement is issued by Petronas on Petronas press release web page, you can probably assume there is a grain of truth to the possibility that Petronas has considered an asset sale of PNW LNG assets.

However, in the current global LNG glut, I don't see many suitors for the assets.

Why a certain Canadian has apparently taken the lead by seemingly making statements attributed to Petronas, is Canadian politics which I'm not qualified to comment about.

Tom Kirkman said...

(Part 7)

It just occurred to me, most Canadians are probably not aware of this...
A month after Petronas issued a press statement denying they were in talks to sell assets to Russia, Petronas was in talks to sell part of its assets to Japan:

KUALA LUMPUR, June 1 — Talks are underway for an affiliate of Japan’s Tokyo Electric Power Co. to purchase a stake in the liquefied natural gas assets of Petroliam Nasional Bhd for about US$200 million (RM823 million), according to the Wall Street Journal.

The US daily cited unnamed sources saying that the deal for Petronas’ LNG assets in Sarawak could be signed as early as this month.

The report added that that the deal would be signed between Petronas and Jera Co. Inc, a joint venture set up by Tepco, and Chubu Electric Power Co. in 2015 to purchase fossil fuels.


I've been told the deal was successful; no public announcement that I'm aware of, though. Granted, it's only a small amount ($200 million) and Petronas retains controlling power.

Canadians interested in what's going on with PNW LNG might want to ask why Petronas felt compelled to recently sell a stake of LNG assets in its own country, to another country.

Grant G said...

@Tom KIrkman....

If you are wondering why we here in B.C. are concerned..

Christy Clark and the BC Liberal Party..going into election 2013..

They were, according to polls, were behind 10% points..

What did Christy Clark and her party do..

Clark painted up a bus..painted debt free V.C. all over it..

Christy Clark promised BCers/voters...

LNG will create over 100,000 off BC's off crown corporation the elimination of the BC sales tax(It brings in $6 billion per year to BC Government) a $100 billion dollar prosperity monies for First Nations, plus money for northern BC communities..

A $trillion dollar in GDP..

2 LNG terminals up and running by 2015 and 2 more by 2020...

5 years later, no shovels in the ground, no revenue..

BC Liberals lied about the potential job numbers, lied about revenue, lied about emissions, lied about roughshot over First Nations..

BC debt over the last 5 years rose $15 billion dollars..


Tom Kirkman said...

@ Grant G,

Politicians. Grrrr. Every country I've been to has its share of politicians who make absurd statements and promises.

I'm pro Oil & Gas (and LNG). My view of PNW LNG is probably much different than yours and Grants. No issue with that. I encourage dissent which is backed by sound reasoning.

Canada got screwed by Petronas. Your politicians don't seem to be aware that Petronas is used to dealing with third world "difficult" regimes that many other countries don't want to risk dealing with. Petronas has managed to make this PNW LNG very favorable for itself, while extracting massive concessions from the Canadian government. I'm used to seeing this type of dealings with countries like Iraq, Syria, assorted African countries, etc. Not used to seeing this type of concessions happening in a first world country like Canada.

On the other hand, Canada has imposed significant environmental restrictions, which is not exactly Petronas' forte.

In the long run, if this PNW LNG goes through, it should be lucrative for Petronas in the long run (30 year lifespan).

While initially there should be some construction jobs for local Canadians, the benefits promised by your local politicians are clearly absurd. Won't happened. You got played.

What is throwing a spanner in the works for PNW LNG is the global LNG glut (until 2020 or 2021) and the resulting low prices for LNG, and the cash crunch by Petronas.

I was amused by the $1 billion cash offer from Petronas for local support for this project, and the resounding rejection by Canadians for the $1 billion.

I fail to see how this PNW LNG project can move forward at this time. So my comment here is probably meaningless.

It might be a wise idea for Canadian politicians to get some qualified negotiators, to deal with the usual hardball negotiations by Petronas.

For the time being, PNW LNG appears dead in the water for at least a couple years.

Just my opinion.

RossK said...

Thanks Tom--

It is, indeed, the playing that disturbs me most.

And the fine political fellow that got out in front of this story is on record as getting record to go to Malaysia and give away even more.

It very much looks like we have a political group in this province at the moment that is actively working to 3rd world us for the benefit of favoured friends and influential uncles (especially those that pay their political freight - we have no restrictions on political donations here)


Anonymous said...

BC Poli-leave the public in an entertainment mode where everything is awesome and move along oh my phone just buzzed.

Grant G said...

@Tom Kirkman..

I wrote everything you said over and over again...However, our opinions differ when it comes to the LNG glut...It will be 2030 before the glut resolves itself

Japan will have 19 nuclear plants up n running by 2017..Fossil fuel import bill is going down by $45 billion in 2017 over 2012..

Israel market for gas dead...

S Korea will still be using coal, and nuclear...

Egypt market is gone..massive offshore gas find..

Russia has Europe covered, ..Russia and China $400 billion piped gas deal..

China will never be put in a position to get screwed by big energy(LNG)

Renewable power investment is dwarfing fossil fuel investment..

Japan LNG market is 1/2 of what is was..Japan will need less energy in the future, not more..population is in sharp decline and new efficiency, less power required..

India will buy power..but they are price sensitive, they can't, and won't pay above $7 dollars, even for longterm contracts..Qatar will supply gas/lng for that price or less..

Vietnam..Thailand..Ivory coast..Africa..all price sensitive..

There is a glut right now..25% excess gas now..with 40% more gas/LNG coming online before 2020...

There have been countless huge gas finds around the world...those countries are almost all vying to tap their concert with big energy paying the freight, those countries want secure domestic supply and a piece of any export action..

Simply put..there are not enough countries with money to absorb the gas..low price producers will survive..

And ...Iran..The world's largest reserves of gas, no need to frac...and Iran is in talks right now with many big energy companies..Iran can go low too..

Glut will last til 2030...and the way renewable power is dropping in price ..

LNG is dead..

Lastly..$billions spent, $trillions spent on LNG...and at the end of the day, countries have nothing to show for buying LNG..renewable power will soon make LNG obsolete...


Anonymous said...

Anonymous said...

burrard thermal Yes!!!

Don F. said...

There could be more than meets the eye as other questions loom some from the Federals actions that have taken place on this.
On the monday prior to the announcement in Richmond by the three ministers McKenna, Carr, and Leblanc, four hereditary chiefs from B.C. were flown to Ottawa. There purpose was for a scheduled meeting with fisheries Minister Dominic Leblanc. They were there to ask the Approval of PNWLNG be shelved. After flying from Vancouver to Ottawa they were informed the meeting was cancelled and Leblanc was in Vancouver to announce approval on the project.
What events took place that required all three ministers to drop all scheduled meetings without notifying those involved and get their collective asses to Vancouver for that announcement?? Why was the announcement made there and not from Ottawa? Why was it done in such haste and early?
We need answers for these questions but it certainly looks bigger than just a flunky like Rich Coleman.

Tom Kirkman said...

@ Grant G

No worries, we have different views on recovery of LNG. I still tend to think the PNW LNG project is economically viable for Petronas in the long term (not the short term).

For Canadians, not so much. The benefits promised by Canadian politicians to Canadian locals are laughable to me. Again, Canadians got played. Look at what happened to Australian LNG projects, when prices crashed. Lots of layoffs, and some LNG projects may never recover their costs.

Agreed about the 40% increase in global LNG before 2020. But my view is still that global demand should catch up to global supply by around 2022. Obviously, I could be wrong about the future.

Grant, you are good at ferreting out information and facts. I'm a moderator on Oilpro, and I appreciate well-constructed arguments backed up with facts. (On this blog, I'm just a harmless old fart, which you can safely ignore.)

Apologies for my atrocious spelling in my earlier comments. Comes from typing on the itty bitty keyboard on my phone. Also can't see much in the blog text window on my phone.

Tom Kirkman said...

Heh heh, that article is not off topic for this thread, in my opinion. Since I don't particularly feel like having an extended 2 week chat with the friendly local police here, that's all I'll say about that.

Tom Kirkman said...

@ Ross K, the oil resource curse does not happen only in third world countries.

Tom Kirkman said...

@ Ross K

[quote]Does it actually matter that it was the BC Liberal government and Rich Coleman who got out in front of the denial story in a fast and furious fashion that was then back-ended by at least one very fine local fellow with PNWLNG and BCL ties?


Consider this.

Who loses if Petronas sells?

Or, put another way, who really loses prior to May 2017 (and might have a really hard time 're-negotiating') if there is even a reasonable public perception that Petronas might sell?[/quote]

This is a negotiating tactic by Petronas. I can't believe the Canadian government is going to fall for this yet [i]again[/i].

Petronas threatens to pull out, and the Canadian side caves in. This is the third or fourth time now. Don't Canadian politicians learn?

In this current scenario which you rightly pointed out, Petronas gets to maintain an "elegant silence" while desperate Canadian politicians attempt to mollify Petronas.

Tom Kirkman said...

Unable to preview posts on this forum from my smartphone. Obviously, BB code doesn't work on this forum.

Tom Kirkman said...

As I mentioned earlier, PNW LNG is dead in the water for now. Probably need to wait until 2020 before Petronas revisits any FID.

Pacific NorthWest LNG president talks FID timing
October 5, 2016

PNW LNG president and CEO Adnan Zainal Abidin said that a global glut of LNG is affecting PNW’s decision timing.

Pacific NorthWest LNG, its consortium leader Petronas, as well as other investors, are waiting for a ‘suitable time’ for gas and oil prices to prove favourable before making a final investment decision.

Pacific NorthWest LNG (PNW LNG) president and CEO Adnan Zainal Abidin spoke last week in an exclusive interview with the Northern View. Abidin said that the current glut of the world’s LNG is having an impact on the timing of any final investment decision (FID).

“LNG prices are closely linked to oil prices, so I think No. 1, [attractive] oil prices certainly make the project viable, No. 2 is about the amount of LNG in the market at the moment,” said Abidin.

“There’s a glut of LNG at the moment, so I think our shareholders will have to see when will be a suitable time when they are able to update the LNG, because at the moment I think there’s a glut in a way that has also affected prices.”

Tom Kirkman said...

By the way, although the FID is dead in the water for the time being, negotiations are far from over. Delaying is but one of many negotiation tactics used by Petronas. (I spent a year hammering out a contract with Petronas - feel free to click my name above to see my profile.)

Expect Petronas to quietly continue negotiating on and off, behind the scenes and without press attention. Petronas will likely continue to try to extract even more concessions from the Canadian government, using the angle that they need to make the PNW LNG project economically viable.

Since it is unlikely that there will be any potential buyers if Petronas tries to sell its assets at its current value, Petronas can take its sweet time to slowly and continuously apply pressure for additional concessions from Canada.

The only real hiccup I see to the scenario I just described above is if Petronas is forced to sell its Canadian assets at fire sale prices, in order to cover its severe cash crunch. (A similar situation happened before, when Petronas sold its entire assets of one of its divisions in an African country a number of years ago for EURO 10,000 - and that number is *not* a typo.)

Petronas does not want others to know the bad cash crunch it is in.

A simple question you can ask your local Canadian legislators: what are Petronas current cash reserves? That is, free cash minus debts. I assure you, you will not get an answer. It's been about a year since Petronas CEO publicly stated the amount of Petronas cash reserves, and that number was cut in half in the space of 1 year, as near as I can determine.

So... pay attention for clues of behind the scenes hardball negotiations, which I expect to be ongoing for quite some time, as the FID waits patiently.

Lew said...

@ Tom Kirkman,

Thanks for the suggestion. I've sent a message vis Twitter asking our Minister on the LNG file, his caucus colleagues, and one of our purported media stars whether their due diligence has uncovered Petronas' current cash reserves and what those receives might be.

Not confident of an answer, but we'll see.

Lew said...

Autocorrect at work in post above. Sorry about that. Should read via and reserves, not vis and receives.

Anonymous said...

Democracy returns to BC in May?

Anonymous said...

Of course Christy and Co are saying this. There is an election in May so that they must continue with the charade that PETRONAS is going ahead with their plans. They are not, this is another political BS story told by them and the media. (Palmer, Smyth, Baldrey etc.)
Last election 100,000 jobs, this election 100,000 jobs. BS. Most jobs created in this province were part time service industry. (Stats Can)
Just so unbelievable that there are so many gullible people in this province that actually believe what the liberal party puts out there. Unfortunate for them, their kids and their grandkids. Time to think for yourselves, research for yourselves, and turn off the tube.

RossK said...

Tom K said...

"It's been about a year since Petronas CEO publicly stated the amount of Petronas cash reserves, and that number was cut in half in the space of 1 year, as near as I can determine."


You could almost substitute 'BC Hydro' for 'Petronas' there...

Anonymous said...


"...BC’s Ministry of Natural Gas Development previously said in an email that it spoke with Petronas and was reassured about the company’s involvement in the proposed LNG export terminal…"

The 'tell's' in this snip. One does require reassurance if they are in a secure position…

Anonymous said...


Blast!…one does NOT require reassurance...

In multi-tasking overload: reading, harvesting, roasting, freezing, reading, raking and more.

Don F. said...

SH makes an excellent point about requiring reassurances!
Another would be Rich Coleman stating he would tighten down the numbers. Wouldn't those numbers, or shouldn't those numbers, be absolutely locked down before the Federal approval? Should negotiations of that nature, in a normal course of events still be happening?
This all begs the question…. do any of our elected officials, Federal or Provincial, have a clue and are they even capable of seeing this through?

Anonymous said...


…and while Rome burns…signs of the end times:

Tom Kirkman said...

Great, Lew. If an answer is received, I would be very much interested in the number. Petronas cash reserves have an impact on the entire country of Malaysia. Budget for 2017 will be released soon, and the amount of dividends, taxes and duties that Petronas pays to the federal government is significant.

e.a.f. said...

Well, if PETRONAS isn't going to sell, then why hasn't a representative who is directly employed by PETRONAS said so or a member of the Malyasian government said so.

Right now, I'd have to say there is a lot of spinning by all sorts of people who would not benefit, if PETRONAS sold part or all of the "deal". Reuters is a fairly well established media organization and if they have 3 sources, I'd say, Upp they're selling and Christy and company are crapping and denying.

lets see what Pammie has to say. I do remember that twittie tweet of hers about trillions of dollars, etc. Just didn't happen. so what makes people think it will happen now?

LNG will only go forward if B.C. taxpayers pay PETRONAS to "take" THE LNG.

Has anyone told Christy there is a homeless tanker of LNG out there. Now I suspect Christy won't care anymore about homeless tankers than she does about homeless people, but just think if she built a shelter for homeless LNG tankers in B.C. It would create jobs, jobs, jobs and there would be trillions of dollars in product, unsold of course, but that won't be in the flyers at election time. Just think a B.C. first, a home for homeless LNG tankers. Kind of makes your heart go pittie pat all over again.

e.a.f. said...

It would not be unreasonable for Russia or Russians to purchase some or all of PETRONAS. those Russian oligarchs have a problem: what to do with all their "ill" gotten gains. For some there is too much to put in a bank. So how better to "clean" their money than to purchase PETRONAS and put a little here and a little there, you know an extra billion here or there and that of course would include B.C. It would be a very nice way for the Russians to gain a foot hold in Canada. It would be so much easier than to explore in our Artic. Given the "nature" of some of our B.C. Politicians, they might find doing business with Russians a really "comfortable" thing to do. We need look no further than the B.C. Rail deal, the IPPs for B.C. Hydro. Watch a few documentaries about Russia, Putin, the Oligarchs and business in Russia.

The Russians owned so much land in London and drove up the prices so much, they changed the law so they had to declare their actually names, no numbered companies, etc. A number of them sold and moved along.

Grant G said...

Petronas being sues along with Exxon for $74 billion US dollars...what for you might ask?

UNPAID ROYALTIES.$74bil-fine---petronas-also-named-in-the-case/

Grant G said...

Petroans and Exxon sued for $74 Billion US dollars..They ripped off Africa and didn't pay royalties.$74bil-fine---petronas-also-named-in-the-case/

Lew said...

Wonder if 35% of US$74 billion has changed the number Rich Coleman says he knows Petronas has to get to here? Or whether his due diligence revealed and factored in this slightly inconvenient performance indicator already?

Tom Kirkman said...

Achmad Sukarsono, a London-based analyst at Eurasia Group said for Petronas to just go through the conditions will already take “months”. He said the additional costs related to the conditions and operating in a country with stringent environmental regulations could decide how long the delay.

“These are not costs that Petronas is familiar with. They (Petronas) had worked in places where these (additional) costs were not part of the operations,” Achmad said.

My comment:

Petronas earlier tried to offer USD $ 1 billion to make the Environmental concerns "go away", but the billion dollar inducement was soundly rejected by Canadian First Nations locals, much to the shock and bewilderment of Petronas (who is used to steamrolling its way through environmental objections from locals in third world countries - Canada is not third world).

So I'm going to guess that the price tag for complying with the 190 environmental preconditions from Canada is more than $1 billion.

RossK said...


Good question about the percentage(s) in 'that number' that Mr. Coleman says he knows that we don't known.

After all known knowns that nobody else knows (or can even begin to know) is what Big Rich really knows all about.

If you get my Rumsfeldian drift.


Thanks, again, for your insights Tom K.


Tom Kirkman said...

< ahem >

Canadians, it seems that Petronas, the National Oil Company of Malaysia, is apparently unable to finance a major Oil & Gas project in its own country.

How on earth could Petronas' apparent financial inability to finance *their own* Oil & Gas project possibly be viewed as "a coup for Petronas"?

This seems to pretty much confirm that any FID for the Canadian PNW LNG project will most likely get deferred for a number of years.

Here's the news:

KUALA LUMPUR: Petronas is expected to bring in Saudi Arabian Oil Co, or Saudi Aramco, as its partner for a roughly USD21 billion (RM87.8 billion) refining and petrochemicals project in Johor.

The Wall Street Journal, quoting two people familiar with the matter, reported that Petronas would make a final decision on the possible partnership in December.

The WSJ said Petronas would offer the world’s largest oil firm a 50 per cent stake in the project which comprises a refinery, petrochemical plants and other related facilities.

If Petronas proceeds with the plan, the two companies will set up a joint-venture company in the first quarter of next year to run the project, with the refinery due to start operating in early 2019, according to the report.

The WSJ said Petronas declined to comment and Aramco wasn’t immediately available for comment.

It said the entry of Saudi Aramco, the world’s largest crude oil exporter, into the project would be a coup for Petronas.

Tom Kirkman said...

@ Ross K, presumably you won't publish this comment.

You may be interested in reading my comments earlier this year about Petronas trying to selling its national oil & gas assets to Russia and China in order to raise cash. See the hyperlinks in my comment:

Side note, earlier this year, Japan's Tepco purchased a $200 million stake in Petronas' premier LNG project in Bintulu, Malaysia. Just Google "Petronas Tepco".

I'm not joking that Petronas is seriously short of cash, regardless of any official pronouncements that everything is fine. Take note that Petronas finances have *never* been independently audited. You can Google that if you wish.