Latest news with #SabahInternationalPetroleum
Borneo Post
09-07-2025
- Business
- Borneo Post
SMJ Energy defends strategy, avoids high-risk oil & gas bids due to financial concerns
KOTA KINABALU (July 9): State-owned SMJ Energy has clarified its decision not to bid for high-investment oil and gas blocks, citing significant financial risks. The company emphasized a cautious approach, opting to secure free carry or back-in rights in exploration projects to mitigate potential losses. Under back-in rights, SMJ Energy only participates after successful exploration, avoiding upfront costs and shielding itself from expensive failures. The statement follows remarks by State Finance Minister Datuk Masidi Manjun, who acknowledged that SMJ Energy and Sabah International Petroleum (SIP) lacked the technical expertise and capital to bid for blocks like the Mutiara Cluster, recently awarded to Dialog Group Berhad's subsidiary. SMJ Energy explained that the Mutiara Cluster falls under Discovered Resource Opportunities (DROs), requiring heavy investment with no guaranteed success. 'These prospects are not a current priority,' the company said in a statement on Wednesday. Instead, its focus remains on securing greater revenue sharing and participation in Sabah's oil and gas sector through its Commercial Collaboration Agreement (CCA) with Petronas. The deal allows SMJ Energy to acquire developed DRO assets from Petronas post-successful exploration. SMJ Energy highlighted its RM5 billion portfolio, including stakes in Samarang PSC (50%), LNG9 (10%) and SAMUR Petrochemical Plant (25%), all generating strong cash flows. Since its inception, SMJ Energy has declared RM160 million in dividends in under three years. 'Oil and gas is high-risk, high-reward — exploration failures can lead to losses in the billions,' the company stated, defending its prudent financial strategy of acquiring profitable, producing assets with reputable operators. Earlier, Parti Warisan information chief Datuk Mohd Azis Jamman criticized the state government for relying on subcontracting instead of direct bidding. SMJ Energy, however, maintains its strategy ensures sustainable growth while minimizing exposure to volatile exploration risks. The company plans to announce further strategic acquisitions aligned with its risk-managed approach. Azis called Masidi's statement that Sabah is 'not ready' to directly participate in bidding for oil blocks an excuse that exposes the real problem with how the state's resources have been managed. 'With due respect, Datuk Seri, your statement that Sabah is 'not ready' reveals more about how our resources have been handled so far: distributing concessions to cronies and sub-contractors, letting others do the work, while the government merely collects 'percent-percent',' he said in a statement. Azis argued that if the state genuinely lacks technical expertise, there should be no excuse not to recruit the right people. 'If we claim we lack expertise, why not recruit and appoint true experts? Find and hire qualified professionals, not political loyalists whose only skill is 'samun dan jilat',' he said, adding that Sabah must start somewhere if it ever hopes to gain experience. 'Every million always starts with number one. Waiting forever keeps Sabah permanently at the margins of its own wealth,' he stressed. Addressing concerns over funding, Azis pointed out that the state government had previously issued almost RM1 billion in SUKUK to settle legacy debts, including buying vessels worth hundreds of millions, the whereabouts of which, he claimed, remain unknown. 'So don't tell us it's impossible to raise funds for SMJ Energy to participate upstream and downstream in Sabah's resource-rich waters,' he said, adding that smart partnerships with credible investors could also be pursued, but with Sabah retaining control over management and its natural resources. Azis also questioned how much experience Petronas contractors had when they first ventured into upstream and downstream operations. 'If those companies were 'ready' back then, why can't Sabah — or SMJ Energy — also be ready now?' he asked. Taking aim at Masidi's oft-cited mantra of 'kerja diam-diam tapi hasil ada' (quiet work, but results are there), Azis countered that the reality on the ground tells a different story. 'It's ironic to hear about 'kerja diam-diam tapi hasil ada' when in reality, Sabah's oil wealth still leaves our shores, and our people see so little,' he said. For Azis, the real issue is not Sabah's readiness but whether its leaders are truly prepared to prioritize the people's interest over political convenience and the sub-contracting of opportunities to cronies. 'True leadership doesn't wait for perfect conditions. True leadership means starting now — building expertise, controlling our resources, and ensuring Sabah finally benefits directly from the wealth beneath our own soil and sea,' he said.
The Star
09-07-2025
- Business
- The Star
High financial risk factors caused SMJ Energy to refrain from Mutiara Cluster bid
Datuk Masidi Manjun.-filepic KOTA KINABALU: State-owned SMJ Energy has admitted that it didn't go into the bidding for high-investment oil and gas blocks due to the high financial risk factors. The company stated that in cases of exploration prospects, SMJ Energy mitigates significant exploration investment risks by securing free carry or back-in rights. Back-in right means that SMJ Energy would only consider participation after exploration success. This approach allows it to avoid committing to major exploration expenses upfront and take no risks in the event of expensive exploration failures, it said. The company's statement on Wednesday (July 9) comes following state Finance Minister Datuk Masidi Manjun's statement at the state assembly on Tuesday (July 8) that Sabah International Petroleum (SIP) and SMJ Energy were not bidding for oil and gas blocks due to a lack of technical expertise and capital. Masidi was referring to the Mutiara Cluster project off the coast of Sandakan, which was recently awarded to Dialog Resources Sdn Bhd, a wholly owned subsidiary of Dialog Group Berhad — a company based in Peninsular Malaysia. SMJ Energy said that the Mutiara Cluster were a Discovered Resource Opportunities (DROs) requiring extensive exploration and development appraisals with major investments, and success was not guaranteed. "These prospects are therefore not a priority for SMJ Energy at present," the company said. According to the company, its key priority for the Sabah government was to secure greater revenue sharing and greater say and participation in oil and gas developments in Sabah through the Commercial Collaboration Agreement (CCA) signed with PETRONAS. Under the CCA, SMJ Energy has the right to acquire DRO assets from PETRONAS when such prospects have been successfully developed. The overall approach explains that SMJ Energy's strategic risk management is responsible for growing a profitable and balanced oil and gas portfolio in upstream oil and gas, LNG and Petchem, taking into account Sabah state's broader financial priorities. SMJ Energy expects to announce more strategic developments and acquisitions in due course in line with the above strategy. Since its establishment, SMJ Energy has grown into a company valued at RM5bil with significant stakes in key assets. It holds 50% equity in Samarang Production Sharing Contract (PSC), 10% in LNG9 and 25% in SAMUR Petrochemical Plant, the company said, adding that there were profitable assets that generated strong cash flows. "As a young startup, SMJ Energy has declared RM160mil in dividends within less than three years. "Oil and gas is a high-investment, high-risk business. Exploration failures can lead to losses amounting to hundreds of millions or even billions," the company said. SMJ Energy practised prudent financial investment, focusing on the acquisition of profitable producing assets generating strong cash flow and operated by reputable operators with proven Environmental, Social & Governance (ESG) track records, the statement said. Earlier Wednesday (July 10), opposition Parti Warisan's information chief criticised the state government for its continued reliance on sub-contracting and concession distribution of its oil and gas instead of taking a more direct role in bidding for oil block exploration.
The Star
09-07-2025
- Business
- The Star
Sabah must take direct role in its oil and gas or risk being sidelined, says Warisan
KOTA KINABALU: Sabah's continued reliance on sub-contracting and concession distribution of its oil and gas instead of taking a more direct role is why the state lacks technical expertise and capital in the field, says Warisan. The party's information chief, Datuk Mohd Azis Jamman ( pic ), was responding to Sabah Finance Minister Datuk Seri Masidi Manjun, who said recently that the state was not ready to bid for oil blocks. 'If we claim we lack expertise, why not recruit and appoint true experts? Find and hire qualified professionals, not political loyalists whose only skills are to plunder and pander. 'And if Sabah has no experience, how will we ever gain experience if we never start?' he said in a statement on Wednesday (July 9). Azis's remarks followed Masidi's statement at the state assembly on Tuesday (July 8), that Sabah International Petroleum (SIP) and SMJ Energy were not bidding for oil and gas blocks due to a lack of technical expertise and capital. Masidi was referring to the Mutiara Cluster project off the coast of Sandakan, which was recently awarded to Dialog Resources Sdn Bhd, a wholly owned subsidiary of Dialog Group Berhad — a company based in Peninsular Malaysia. Azis argued that the state could bring in talent from outside if needed, while ensuring local professionals learn alongside them. 'Every million starts with number one. Waiting forever keeps Sabah permanently at the margins of its own wealth,' he said. On capital concerns, Azis pointed out that the state government had previously raised nearly RM1bil through a sukuk issuance to settle legacy debts, including vessel purchases whose current status is unclear. 'Don't tell us it's impossible to raise funds for SMJ Energy to participate in both upstream and downstream sectors,' he said. He also suggested forming smart partnerships with credible investors while ensuring Sabah retains control over resource management. Azis questioned whether PETRONAS' early contractors were fully experienced when they were first appointed, arguing that Sabah too can build capacity through action. 'It's ironic to hear about 'kerja diam-diam tapi hasil ada' when in reality, Sabah's oil wealth still leaves our shores, and our people see so little,' he said. Azis said the real question is not whether Sabah is ready — but whether its leaders are ready to stop political patronage and prioritise Sabah's long-term interests. 'True leadership doesn't wait for perfect conditions. True leadership means starting now — building expertise, controlling our resources, and ensuring Sabah finally benefits directly from the wealth beneath our own soil and sea,' he stressed.
Daily Express
08-07-2025
- Business
- Daily Express
Sabah not ready to bid for oil block, says Masidi
Published on: Tuesday, July 08, 2025 Published on: Tue, Jul 08, 2025 By: Abbey Junior Text Size: KOTA KINABALU: Sabah did not participate in bidding for the Mutiara Cluster oil block as its state-owned firms, SMJ Energy and Sabah International Petroleum (SIP), lack the capital and expertise for large-scale exploration, said Finance Minister Datuk Seri Masidi Manjun. He told the State Assembly that the Mutiara PSC, recently awarded to Dialog Group Berhad, was part of an international bid and still in the exploration stage. Masidi assured that Sabah's interests remain protected under the Commercial Collaboration Agreement with Petronas, and hinted at future involvement by SMJ. In response to opposition leader Datuk Seri Mohd Shafie Apdal's criticism over Sabah's exclusion, Masidi said the government prefers 'quiet but consistent' efforts over rhetoric. The Mutiara Cluster, off Sabah's east coast, comprises five marginal fields, with first gas expected before Q1 2029. * Read full report in tomorrow's print paper or log in or sign up for e-paper and premium online news access. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Free Malaysia Today
30-05-2025
- Business
- Free Malaysia Today
Warisan's track record doesn't reflect good governance, says GRS leader
Restructuring efforts are being carried out for Sabah International Petroleum and Sabah Development Bank, says GRS's Penampang Youth chief Ceasar Mandela Malakun. PETALING JAYA : Warisan's track record with state-linked companies does not reflect good governance, says a divisional youth chief of Gabungan Rakyat Sabah. Ceasar Mandela Malakun, head of GRS Penampang Youth, dismissed recent claims on good governance raised by Warisan vice-president Junz Wong. Malakun said Warisan's portrayal of itself as a reform-oriented government did not reflect the realities of its time in power from 2018 to 2020. Malakun highlighted the serious concerns that were raised over Sabah International Petroleum (SIP) and Sabah Development Bank (SDBank) at the time. The concerns were about the concentration of power and oversight when the chief minister, who was also state finance minister, added on the role of SIP chairman. 'From May 2018 to September 2020, SIP's debts to SDBank increased from RM1.05 billion to RM1.24 billion, while its total group liabilities – combining those with commercial banks – rose to RM1.75 billion,' he said in a statement today. Malakun also pointed to SDBank's external bond obligations which reportedly jumped from RM3.66 billion to RM4.57 billion by the time Warisan left office. 'Despite clear signs of financial distress, the bank continued to declare annual profits,' he said. 'Industry observers at the time said this raised concerns of governance weaknesses, including the possible use of creative accounting practices that may have masked the bank's underlying financial risks,' he said. Malakun said the GRS-led government is currently undertaking restructuring efforts to restore proper financial discipline, improve risk management, and ensure that SIP and SDBank serve their developmental mandates effectively. 'Sabahans deserve the truth, not Junz's selective memory. Governance isn't about rhetorics, it's about taking responsibility,' he said.
