PETALING JAYA: The next 24 hours will be crucial for the country’s largest and richest company, Petroliam Nasional Bhd (Petronas), as a decision will be made during this time as to who gets to helm the company.
While it had been widely reported recently that the oil giant’s current president and chief executive officer, Tan Sri Shamsul Azhar Abbas, will be offered only a 7-month contract extension, nothing has been firmed up yet considering that there is no statement from Petronas at the time of writing.
The last day of his contract is supposed to be today.
Meanwhile, Shamsul is to address Petronas staff in a townhall meeting slated for today. It is left to be seen if the contract extension will be finalised by then. Earlier reports indicated that a successor to Shamsul will be announced soon.
Four names have been speculated to be front runners for this – Datuk Wan Zulkiflee Wan Ariffin, Datuk Mohd Anuar Taib, Datuk Ahmad Nizam Salleh and Md Arif Mahmood.
Wan Zulkiflee and Anuar are two names which have been repeatedly said to be strong replacements for the top job at Petronas, while Ahmad Nizam and Md Arif, as potential contenders, have somewhat come as a surprise.
Wan Zulkiflee, 54, is currently the chief operating officer and executive director of Petronas. He is also executive vice-president of the downstream business at the oil company and chairman of Petronas Chemicals Group Bhd and Petronas Dagangan Bhd.
Anuar is senior vice-president of Petronas’ upstream business in Malaysia, but is better known for his stint at Shell Malaysia, where he was chairman and vice-president of its upstream international business.
The lesser-known Ahmad Nizam, who is 59 years old, is the managing director and CEO of Petronas’ 80%-owned unit Engen Ltd based in Cape Town, South Africa.
Ahmad Nizam’s name had also surfaced a few years ago when he was said to be a possible candidate to replace former Petronas president and CEO Tan Sri Hassan Marican.
Md Arif is senior vice-president of corporate strategy and risk, a role he has held since last April. Insiders say he had on a few occasions been asked to step in to the leadership role when Shamsul was travelling and one of those was to oversee the evacuation of employees from South Sudan in December 2013 when trouble broke out there.
Shamsul first took the top job at Petronas in 2010 as president and CEO on a three-year contract. He was then given a two-year extension, which would expire today.
But whoever Shamsul’s successor would be, he would have a tough act to follow. While Shamsul isn’t anywhere close to winning the most likeable CEO award of the year, especially not from certain lobby groups who must have found his ways “frustrating”, his efforts at nudging Petronas to behave more like an international oil company (IOC) rather than a national oil company (NOC) are noteworthy.
It is interesting to also note that at a time when Brazil’s Petrobras is imploding due to scandal, Petronas’s standing among its clients, stakeholders and rating agencies is probably at an all-time high.
Only this week, rating agency Moody’s said Petronas’ credit profile remained untroubled compared to its peers despite an expected earnings decline by Asian oil and gas players in 2015.
Moody’s pointed to Petronas’ large liquidity buffer and prudent capital management policies that give it the financial flexibility to weather the downturn caused by the oil slump.
This is just one small indication of the kind of effective management that Shamsul and his team have put in place, extending the strong leadership from the days of former CEO Tan Sri Hassan Marican, who left Petronas in February 2010.
Valuable insights into Shamsul’s management style can be seen from a speech he delivered to Petronas’ top management just last month.
Shamsul’s message was chiefly about how Petronas should behave, going forward, in a new reality of weak demand and low prices for its products and about managing cost.
According to sources, Shamsul said that now more than ever, Petronas needs to keep on pushing its tenets of cost consciousness, having only quality assets and pursuing meritocracy within the organisation.
Shamsul also said that while he had seen positive changes in these pursuits at Petronas, he reckoned that this was still not “pervasive, even at the highest levels”, indicating the room for improvement.
He also raised the question if Petronas should be locking in contracts on a long-term basis in a time of softening crude oil prices, noting that the prices of some services would be more competitive in the shorter term.
He urged Petronas’ management to be more savvy in their approach and not fall back on the conventional way of doing things.
Shamsul also called on Petronas to benchmark its cost against the market and competitors and asked all senior managers to scrutinise internal spending, warning the oil giant not to suffer from the “rich man” syndrome considering the wealth that Petronas had built up over the years.
Shamsul’s successor would do the country and its future generations well if these principles were pursued and enhanced further.