Sanichi’s Petronas contract

AN important role that is played by national oil company Petroliam Nasional Bhd (Petronas) is to help build local expertise in the oil and gas sector.

Petronas, which is the guardian of Malaysia’s oil and gas deposits, has over the years carried out this job in all hope of building up the capabilities of the local companies. In its course of undertaking the task, the national oil company often comes under cricitism for not dishing out enough to certain companies.

Petronas stand has always been clear that contracts will be awarded to local companies that are serious in building up their skill sets and who meet the required criteria. In some cases, leeway is given to the local company if it brings in a foreign company that has the specialised skill set or technology. However, over time, the local company will have to be independent of the foreign company.

What the oil giant has always sought to avoid is dishing out such contracts to those who merely wish to act as middle men who bring little or no value into the equation.

This is why companies have to first meet certain qualifications before they are even licensed to bid for Petronas jobs. In this regard, the recent announcement by Sanichi Technology Bhd does raise a question.

The company said that it is tying up with a licensed Petronas contractor to bid for Petronas contracts related to oil storage tank terminal projects in Malaysia and the region. Sanichi even estimated the value of the oil storage terminal projects to be above RM1bil. While Sanichi’s management should be applauded for the effort to secure new projcts for the company, the question remains as to what role the Petronas contractor, namely Petrowangsa Sdn Bhd has in the whole job?

What is the overall scope of work for Petrowangsa that it is able to hand over some RM1bil worth of work to Sanichi?

And over time would Petrowangsa handle the job itself?

That is after all the objective of Petronas to award jobs to local companies.