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Brighter outlook for oil & gas sector

KUALA LUMPUR: Finance Minister Lim Guan Eng said the forecast rebound in crude oil prices bodes well for the Malaysian oil and gas (O&G) industry.

In his speech at the Asian Oil, Gas and Petrochemical Engineering Exhibition (OGA 2019) today, he said the improved sentiment is expected to revive exploration and production activities that were previously deferred or suspended due to lower oil prices.

Lim added that the price of Brent crude is expected to hover around US$60 (RM250.95) to US$70 per barrel this year.

“Last year, the world experienced great volatility in oil prices. Brent crude oil prices rose to US$86 per barrel in early October 2018 from US$67 at the start of last year. But less than two months afterwards, prices dropped by 30% to US$57 per barrel due to a glut in the global market, before rising to US$62 per barrel as of today.”

“For the government, each US$1 per barrel increase in oil prices brings the Treasury approximately RM300 million in revenue per year.”

However, he explained that the government no longer heavily relies on oil revenue as before. He further shared that while petroleum-related revenue accounted for 41.3% of government revenue in 2009, this figure has declined over the years to an estimated 19.5% of total government revenue in 2019 which excludes the special dividend from Petronas that was used to finance the goods and service tax and income tax refunds.

Lim also noted that the expected increase in global crude oil prices is positive for Malaysia’s upstream sector as it is reviving industry appetite in exploration and development works, especially for projects located in deepwater and technologically challenging areas where the costs of investment and operation are high.

He is of the view that Malaysia is strategically located in the supply chain that it is benefiting greatly from the ongoing US-China trade war through business relocation as well as trade and investment diversions.

“The reorientation of the global supply chain, and Malaysia’s competitiveness have resulted in the country’s approved foreign direct investment (FDI) in manufacturing surging 127% to RM20.2 billion in the first quarter of 2019 from RM8.9 billion a year ago.”

“Total approved FDI across all sectors for the first quarter of 2019 rose 73.4% year-on-year to RM23.9 billion from RM16.9 billion,” he added.


RAPID to start commercial operations in Q4 2019, finance minister says

KUALA LUMPUR, June 18 — The Refinery and Petrochemical Integrated Development (RAPID) project is set to begin commercial operations in the fourth quarter of this year (Q4 2019), said Finance Minister Lim Guan Eng today. He said the project would…


Guan Eng: Malaysia welcomes investments that raise skills, wages

PUTRAJAYA, June 11 — Malaysia will welcome any investments from abroad — especially from Japan — that will raise the skills and wages of Malaysian workers. Finance Minister Lim Guan Eng said such investments would improve the competitiveness…


Ex-Celcom exec marked as favourite for TM’s CEO seat

KUALA LUMPUR, June 10 — Celcom’s former chief special projects officer, Datuk Noor Kamarul Anuar Nuruddin has emerged as a favourite for TM’s CEO, sources told NST. Three candidates have been shortlisted for the top job but sources say Noor…


Finance Ministry: Encouraging trade data sign of robust Q2

KUALA LUMPUR, June 7 ― Malaysia’s export data for April which recorded positive growth of 1.1 per cent to RM85.2 billion, is an indication of early signs of a robust second quarter (Q2) gross domestic product (GDP) growth. Finance Minister Lim…


Emulate foreign investors’ confidence in Malaysia, Guan Eng tells local private sector

KUALA LUMPUR, May 18 — The government hopes the domestic private sector will emulate the confidence shown by foreign investors in Malaysia by helping to further strengthen the nation’s growth, says Finance Minister Lim Guan Eng. The first…


Guan Eng: Malaysia's encouraging Q1 growth will boost investor confidence

KUALA LUMPUR, May 17 — The encouraging performance of Malaysia’s gross domestic product (GDP) in the first quarter of 2019 (Q119) provides positive impetus for the country’s future growth, as well as strengthening investors confidence in…


Streamline govt, private sector valuation methods, says Lim

KAJANG: Finance Minister Lim Guan Eng has called for a transparent standard operating procedure (SOP) to narrow the gap between property valuations derived by the government and the private sector.

“I always hear that there is a difference between the valuation figures provided by the government sector and the private sector valuers. We need to see how the gap can be narrowed,” he said in his opening speech at the launch of the Property Market Report 2018 today.

He said the differing values are due to different valuation methods used, for instance, the comparison method employed by the Valuation & Property Services Department (JPPH).

However, he said the cost and depreciation method may be more suitable in some cases and recommends more engagements between JPPH and the private sector in order to streamline the methods used.

“I believe if there are clear SOPs, then the gap in property prices will not be so wide,” he added.

JPPH director general Ahmad Zailan Azizuddin said the cost and depreciation method is the last resort used by the department, because the cost of a development is not the same as the value of a development.

“We normally use the comparison method. He (Lim) has suggested to use the cost and depreciation method, which is our last resort because cost does not equal value. Cost and value are very different from each other. Value is based on transactions in the market, whereas cost is based on facts,” he said.

Although the cost and depreciation method could be used for affordable housing, Ahmad Zailan said government intervention is needed to ensure transparency in development costs.

He said the government should draw up a policy to compel property developers to reveal the actual cost of development for their projects. At present, there is no transparency in the components of development cost and the department relies on estimates when carrying out valuations.

He said the government and private sector valuers carry out valuations based on the same principal and standards but there could be differences in opinion and interpretation of the standards, which leads to differing valuations.


Govt, private sector valuation methods need to be streamlined, says Lim

KAJANG: Finance Minister Lim Guan Eng has called for a transparent standard operating procedure to narrow the gap between property valuations derived by the government and the private sector.

“I always hear that there is a difference between the valuation figures provided by the government sector and the private sector valuers. We need to see how the gap can be narrowed,” he said in his opening speech at the launch of the Property Market Report 2018 today.

He said the differing values are due to different valuation methods used, for instance, the comparison method employed by the Valuation & Property Services Department (JPPH).

However, he said the cost and depreciation method may be more suitable in some cases and recommends more engagements between JPPH and the private sector in order to streamline the methods used.


Fund flow reversal into equities market as early as Q3, analyst says

KUALA LUMPUR, April 29 — Malaysia’s equities market is expected to see a reversal of fund flows and as early as the third quarter (Q3) of this year, an analyst said. Rakuten Trade head of research Kenny Yee said this would be underpinned by the…