Petronas-Exxon-Pertamina: Lessons learned

While some Indonesians, especially political pundits, bussy to reject ExxonMobil as the operator of the giant Cepu oil field, Malaysia's Petronas quitely opens its first gas station in Cibubur, near Jakarta. Petronas is the second multinational to open gas station in Indonesia after Shell, the super major along with ExxonMobil and Beyond Petroleum (BP).

We, Indonesians, are always jealous with Petronas. Those who loves Formula One easily noticed Petronas in one of the only 11 teams competing in the racing. Their existence would significantly be boosted with their recently announced plan to be the largest player in retail market of fuels in Indonesia.

Petronas used to learn from Pertamina, Indonesia's state-owned company. The Malaysian even adopted the production sharing contract (PSC) system in oil and gas business. They modified that, off course. In less than two decades, Petronas emerged as one of the largest companies in the oil and gas business. It has ventured into various countries, become a global oil and gas player.

What's wrong with Pertamina? Why Petronas managed to surpass Pertamina in almost every aspects of the business? A simple comparison: Pertamina booked net profit of around US$1.3 billion last year, while Petronas 10 times Pertamina's. Pertamina's oil production was 140,000 barrel per day, while Petronas at 567,000 barrel per day.

Can we learn something from Petronas?

Partnership. No way that Petronas could become a world player without partnership with other global players such as Chevron, Mitsubishi, ExxonMobil or BP.

Under production-sharing contracts, ExxonMobil's 600 wells account for about half of Malaysia's oil production and two-thirds of Peninsular Malaysia's natural gas production. Petronas Carigali Sdn. Bhd., a subsidiary of Petronas, is a co-venturer in all but two of the 11 fields operated by ExxonMobil.

ExxonMobil Exploration and Production Malaysia Inc., (formerly known as Esso Production Malaysia Inc), is the largest oil producer in Malaysia and largest supplier of gas to Peninsular Malaysia, producing approximately 280 thousand barrels of oil and 1.4 billion cubic feet of gas per day.

Building on experience, Petronas has extended its reach by forming ventures with ExxonMobil and other multinationals to explore for oil and gas in Africa, the Middle East and Central Asia. The highlight is the Petronas and ExxonMobil membership in the $3.5 billion Chad Project (ExxonMobil interest, 40 percent; Petronas 35 percent; and Chevron, 25 percent).

Petronas is also a 15 percent interest holder in ExxonMobil's Block 24 offshore Angola and Block 214 offshore Nigeria.

Suprisingly, those who oppose ExxonMobil and insist to have Pertamina as the leader in Cepu project, tend to use Petronas as the role model of nationalism in developing the country's natural resources. I'm afraid these guys use the wrong model or they just don't want to read or just to make the case against government.

READ MORE!!!