List Petronas?

Why not list the national oil corporation Petroleum Nasional Bhd or Petronas? That was the question posed by P. Gunasegaram in Malaysiakini on 21 February 2025. 

Saudi Arabia listed its wholly owned oil company, the world’s largest oil producer Saudi Aramco, in 2019, on its Tadawul exchange, by selling just 1.5 percent to investors and raising US$25.6 billion (RM113 billion at current exchange rates). 

Source: https://en.wikipedia.org

Its current market value is about US$1.8 trillion or RM8 trillion, among the most valuable companies in the world and its most profitable by far. Petronas could be valued at over RM1 trillion (US$226 billion) and will account for a third of Malaysia’s expanded market capitalisation if it is listed. It could raise funds of around RM50 billion for floating just five percent. Because it is a huge company, it will provide considerable depth and width to the local stock market and boost market liquidity. This is the seed capital for a sovereign wealth fund, beyond Khazanah 

Its listed status will ensure public scrutiny and timely disclosure of all relevant information to an investing public. But that is the key issue. Currently, only the PM know its true workings. Not the Cabinet, Parliament or PAC. 

Petronas is the only Fortune 500 Malaysian company, ranked 167 in terms of revenue. In 2023, it made a net profit of RM80.7 billion, a fifth down from 2022’s RM101.6 billion. Lower energy prices, higher costs and tax expenses as well as foreign exchange impact saw the national oil company posting a 32% or RM25.6bil drop in net profit to RM55.1bil for the financial year ended Dec 31, 2024 (FY24) compared with RM80.7bil in FY23. 

Revenue for the period fell by 7% on-year or RM23.6bil to RM320bil primarily due to discontinued operations impact of RM23bil, while softer energy prices were offset by higher sales volumes, the company noted in a statement yesterday. 

Will they do it? No. Why? It is the private “war chest” of the PM in power. There is always a good reason to keep it from public scrutiny, so it can rescue various parties when required!

 

References:

Comment | Why not list trillion ringgit Petronas?P. Gunasegaram, Malaysiakini, 21 February 2025

Petronas FY24 net profit at RM55bil, Bhupinder Singh, The Star, 26 February 2025