Books for Winter

The first thing I did after my exam ended yesterday was headed uphill to Randwick. My destination was a second-hand bookstore at Avoca Street, which has now officially become my favourite bookstore. I discovered this haven about a couple of months ago, and during that first visit I ended up buying Tariq Ramadan’s The Messenger despite the fact that I was broke, and my intention for going to Randwick had nothing to do with books. I encountered plenty of good, quality books back then, and it was enough to convince me that this must be one of the best second-hand bookstores on planet Earth. One thing though, they are a bit pricey for used books, but that is understandable given that they are of superior quality, almost like new. Newtown also has several similar bookstores, but what they lack are latest, crease-free books, two criteria that top my list when selecting books.

This time, still broke, I walked into the bookstore to the welcoming sight of Muhammad Yunus’ Creating World Without Poverty, a book that has just recently made it into my wish list having learnt that Nageb, my best friend is currently reading it. I made the usual practice of examining a few pages of the book, reading the comments on the back cover and taking a peek at the price tag (the most important thing) before deciding to put it back, a decision that was later proven to be a wise one. More on that later. I basically spent the next one hour or so glancing through the stacks of volumes arranged neatly on the cabinet in search of any title that I may be interested in. Nevertheless, I walked out of the store empty-handed, not that I did not find anything but more because I knew that there is someplace else I could head to if I were to look for similar stuffs without actually hurting my pocket.

I stopped by at the main library of the university on my way back, getting myself three books (one of them is Creating World Without Poverty that I contemplated on buying earlier) and headed home with a smile on my face. What a joy brought by this library. I just discovered recently that they have a huge range of collections that include those on my wish list, and from that point on I decided to stop buying books altogether, at least those that are crazily expensive, since I can easily get them there. Oh, did I tell you that I had already borrowed another three books before in the middle of the exams week?

I have been reading like there is no tomorrow in these past few weeks starting from the start of the study period to the point that I almost abandoned my preparation for exams. InsyaAllah while this gush is still on, I will try to continue reading, especially with winter break on the horizon. I am currently struggling with the last few chapters of Collapse, which I had abandoned since last year, and I expect to finish this book together with The Secret History of Al-Qaeda in the next few days. I have not decided yet which one to go with after this, but that should not be a difficult task given the stack of resources that I currently have with me. In the meantime, I hope you guys enjoy your holiday.

PETRONAS, Crude Oil, Fuel Prices, etc

I received this email, and I thought it might be worth sharing. I could not find who the author is though but I believe it must be someone in the industry. I have never been really keen on the idea of copying and pasting stuffs on this blog- especially a long one- but this seems to be a rather important one.

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Dear all, After reading all the chain mails and blogs, I feel called to reply, because of the relentless attacks and allegations- most of which are inaccurate or baseless- against PETRONAS.

PETRONAS' STAFF SALARY & BONUS

1) The salaries paid to PETRONAS' employees are not as high as people think. At best, they are just industry average. And these are not attractive enough for some who left PETRONAS to find work at other companies (mainly from the Middle East) which are willing to pay more. Why do they pay more? The oil and gas industry worldwide has been facing acute shortage of qualified or experienced personnel, so most companies are willing to pay lots of money to entice and pinch staff from their competitors. Bonus? There has NEVER been a bonus amounting to 6 months or 12 months throughout the 33 years. On average, it is 2 months. But don't ever think we don't deserve it. We more than deserve it. A lot of us work really hard, some in the most extreme of conditions. Those who have been to and worked in northern Sudan, for example, would testify that it's like working in a huge blower oven. Southern Sudan, on the other hand, is almost all swamps and mud. Imagine having to go through that kind of heat, or waddling in muddy swamps, day in and day out.

QUALITY OF CRUDE & REFINED PRODUCTS

2) Malaysia produces about 600,000 barrels of crude oil per day (and about 100,000 barrels condensate). Of this crude volume, 339,000 barrels are refined locally for local consumption. The rest is exported (and yes, because it has lower sulphur content it fetches higher prices). Malaysia also imports about 230,000 barrels of crude oil per day, mainly from the Middle East, to be refined here. This crude oil contains higher sulphur and is less expensive (so the country gains more by exporting our crudes). In Malaysia, this crude is processed by PETRONAS at its second refinery in Melaka, and also by Shell at its Port Dickson refinery. Different refineries are built and configurated to refine different types of crude. And each crude type yields different percentage of products (diesel, gasoline, kerosene, cooking gas etc) per barrel. But most importantly, products that come out at the end of the refining process have the same good quality regardless of the crude types. That's why PETRONAS, Shell and Exxon Mobil share the same pipeline to transport the finished products from their refineries to a distribution centre in the Klang Valley. The three companies collect the products at this centre accordingly to be distributed to their respective distribution networks. What makes PETRONAS' petrol different from Shell's, for example, is the additive that each company adds.

PETRONAS' ROLE, FUNCTION & CONTRIBUTION

3) A lot of people also do not understand the role and function of PETRONAS, which is essentially a company, a business entity, which operates on a commercial manner, to mainly generate income and value for its shareholder. In this case, PETRONAS' shareholder is the Government. In 1974, when PETRONAS was set up, the Government gave PETRONAS RM10 million (peanuts, right?) as seed capital. From 1974 to 2007, PETRONAS made RM570 billion in accumulated profits, and returned to the Government a total of RM335.7 billion. That is about 65% of the profits. That means for every RM1 that PETRONAS makes, 65 sen goes back to the Government. Last year, PETRONAS made a pre-tax profit of RM86.8 billion. The amount given back to the Government (in royalty, dividends, corporate income tax, petroleum products income tax and export duty) was RM52.3 billion. The rest of the profit was used to pay off minority interests and taxes in foreign countries (about RM7.8 billion- PETRONAS now operates in more than 30 countries), and the remaining RM26.7 billion was reinvested. The amount reinvested seems a lot, but the oil and gas industry is technology- and capital-intensive. Costs have gone up exponentially in the last couple of years. Previously, to drill a well, it cost about US$3 million; now it costs US$7 million. The use of rigs was US$200,000 a day a couple of years ago; now it costs US$600,000 a day. A lot of people also do not realise that the amount returned by PETRONAS to the Government makes up 35% of the Government's total annual income, to be used by the Government for expenditures, development, operations, and yes, for the various subsidies. That means for every RM1 the Government makes, 35 sen is contributed by PETRONAS. So, instead of asking what happens to PETRIONAS' money or profits, people should be questioning how the money paid by PETRONAS to the Government is allocated.

CRUDE EXPORTS & FUEL PRICES

4) A lot of people also ask, why Malaysia exports its crude oil. Shouldn't we just stop exporting and sell at cheaper prices to local refiners? If Malaysia is an oil exporting country, why can't we sell petrol or diesel at cheaper prices like other oil producing countries in the Middle East? I guess I don't have to answer the first couple of questions. It's simple economics, and crude oil is a global commodity. Why can't we sell petrol and diesel at lower prices like in the Middle East? Well, comparing Saudi Arabia and other big producers to Malaysia is like comparing kurma to durian, because these Middle Eastern countries have much, much, much bigger oil and gas reserves. Malaysia has only 5.4 billion barrels of oil reserves, and about 89 trillion cubic feet of gas. Compare that to Saudi Arabia's 260 billion barrels of oil and 240 trillion cubic feet of gas. Malaysia only produces 600,000 barrels per day of oil. Saudi Arabia produces 9 million barrels per day. At this rate, Saudi Arabia's crude oil sales revenue could amount to US$1.2 billion per day! At this rate, it can practically afford almost everything- free education, healthcare, etc, and subsidies- for its people. But if we look at these countries closely, they have in the past few years started to come up with policies and strategies designed to prolong their reserves and diversify their income bases. In this sense, Malaysia (and PETRONAS) has had a good head start, as we have been doing this a long time. Fuel prices in Malaysia is controlled by the Government based on a formula under the Automatic Pricing Mechanism introduced more than a couple of decades ago. It is under this mechanism that the complex calculation of prices is made, based on the actual cost of petrol or diesel, the operating costs, margin for dealers, margin for retail oil companies (including PETRONAS Dagangan Bhd) and the balancing number of duty or subsidy. No retail oil companies or dealers actually make money from the hike of the fuel prices. Oil companies pay for the products at market prices, but have to sell low, so the Government reimburses the difference- thus subsidy. Subsidy as a concept is OK as long as it benefits the really deserving segment of the population. But there has to be a limit to how much and how long the Government should bear and sustain subsidy. An environment where prices are kept artificially low indefinitely will not do anyone any good. That's why countries like Indonesia are more pro-active in removing subsidies. Even Vietnam (which is a socialist country, by the way) is selling fuel at market prices.

PETRONAS & TRANSPARENCY

5) I feel I also need to say something on the allegation that PETRONAS is not transparent in terms of its accounts, business transactions etc. PETRONAS is first and foremost a company, operating under the rules and regulations of the authorities including the Registrar of Companies, and the Securities Commission and Bursa Malaysia for its listed four subsidiaries (PETRONAS Dagangan Bhd, PETRONAS Gas Bhd, MISC Bhd and KLCC Property Holdings Bhd. PETRONAS the holding company produces annual reports which are made to whomever wants them, and are distributed to many parties and places; including to the library at the Parliament House for perusal and reading pleasure of all Yang Berhormat MPs (if they care to read). PETRONAS also makes the annual report available on its website, for those who bother to look. The accounts are duly audited. The website also contains a lot of useful information, if people really care to find out. Although PETRONAS is not listed on Bursa Malaysia, for all intents and purposes, it could be considered a listed entity as its bonds and financial papers are traded overseas. This requires scrutiny from investors, and from rating agencies such as Standard & Poor and Moody's.

BOYCOTT PETRONAS?

6) The last time I checked, this is still a democratic country, where people are free to spend their money wherever they like. For those who like to see more of the money that they spend go back to the local economy and benefiting their fellow Malaysians, perhaps they should consider sticking to local products or companies. For those who like to see that the money they spend go back to foreign shareholders of the foreign companies overseas, they should continue buying foreign products.

FINAL WORD (FOR TODAY)

I'm sorry this is rather long, but I just have to convey it. I hope this would help some of you out there understand something. The oil and gas industry, apart from being very capital intensive, is also very complex and volatile. I'm learning new things almost every single day. Appreciate if you could help to forward this response to as many contacts as possible to counter the subversive proposal out there. Thank you.

Hypothesis

My quick glimpse at the newspaper today caught a glaring headline, about a man who was beaten to unconsciousness while looking for help for his dying mother. I was stunned. Reading through that piece of news left me brokenhearted. As if we cannot get enough of Nurins and Sharlinies, gang rapes and various other robberies.

He was an innocent chap, he came to you merely to ask for your help, but you whipped him, you robbed him. What harm would he cause you if you just leave him alone, pretending that you did not notice his call for help? Even if you are such a thug would not it be enough to just seize his belongings and leave? He was already in a deep trouble, a desperate man looking for help, what were you thinking when you decided to put your hand on him? The worst thing is you did not only ruin his life at that particular moment, but you also stole his final chance to see her living mother.

My, what has become of this country?

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Steven D. Levitt and Stephen J. Dubner in their book, Freakonomics suggested that the decline in the crime rates in the US in 1990s was down, somewhat surprisingly, to the legalization of abortion that was implemented a couple of decades earlier in the country, a move widely known as Roe vs. Wade. This raised not only one or two eyebrows, since many just could not see the link between an abortion law that was implemented two decades back and the impact it has on crime rates of future society. Both authors later justified that with abortion being legalized, many ‘unwanted’ children who would most probably grow up in bootless environments were they to be born, were aborted by their parents instead. Well, it makes sense that when children live in such environments, with lack of care from parents who did not want them in the first place, chances are they are going to try their hand on crime. Of course things were not that simple, but that was basically the hypothesis.

Now, would you like to listen to my hypothesis? Here goes.

If some parts of our society were to continue living in a destitute state of life, it would not be long before we hear such cases as above making headlines in our daily newspapers again and again. How many times since the announcement of the oil price hike did we hear about dads having to look for part time jobs after their day works, or families struggling to live as the result of the rise in food price? That man in my previous story went back from work at 3am to see his mom before he got beaten. What do you think he was doing that late if not looking for extra dollars to make ends meet? The living standard will go down low, people will struggle to live, and back home children will be neglected by parents who have no choice but to work extra hours just to keep the family well-off and healthy. Needless to say, crime rates especially robbery will be on the rise, while the neglected children will resort to wrong ways to find a place in the society. That is my hypothesis. Of course what mentioned is not a true representative of the society, but there is no way we can close one eye at this looming problem. I am no economic professor or well-known figure like the two authors of Freakonomics, but if I can see this problem coming but our government does not then there must be something terribly wrong with this country.

Please, do something.

Dr. Azmi Sharom's Column

I am not a fan of our local mainstream newspapers. Save for a few sections in The Star that I check daily just to keep myself updated with day-to-day occurrences in the motherland, there is nothing much that I look forward to when reading our newspapers. There is an exception, however. The weekly Thursday column by Dr. Azmi Sharom on The Star under the heading of ‘Brave New World’ is a must-read for me.

I cannot recall when exactly did he start this column, or when did I first chance upon it, but it must be close to a year, if not more. What attracts me, apart from his elegant writing style and habitual witty remarks is his ability to connect to readers. Issues that he brought up are those that we often hear at coffee shops or mamak stalls, muttered by ordinary folks who do not have the right, open avenue to channel their voice out. Dr. Azmi Sharom plays his role perfectly in representing these ordinary folks in his column.

Anyway, what led me to jot down about this is the latest post by him, inspired by the recent cut of the ministers’ allowance as the result of the hike in oil price. He chose to write in a fictional style this time around, which is a bit different than his previous writings but it still makes an enjoyable reading material. A truly definitive account of the lavish life led by our dear ministers.

Keeping Close Ties

I came across a number of occasions in the past couple of weeks that bring me into close contact with my batch mates again. Alhamdulillah. No, it was not that I did not try to keep myself in touch with them before. You see, the distance, coupled with the diverging life paths that we are taking now seem to have its toll on the relationship that we have worked on for the past seven years. At least that is how I felt.

I spoke to Ammar again last night for about 30 minutes. I tried to persuade myself to give him a call whenever I have a chance to, before distance plays a greater role as he is leaving for US. I will try to do the same for Nageb and Mukhlis. Ammar was his usual cheery self, despite the personal problems he claimed he was having. Now, I do not have a slightest idea what on earth his problem is, but Ammar being Ammar, I am pretty optimistic that at the end of the day he will able to handle any problem he is burdened with. Thanks to Facebook, I have also managed to exchange remarks with Kandaq, Mukhlis, Jaya, Ober and a few others. Also, a couple of days ago Jemel sent me a message on Friendster telling me about his personal problem which I would want to disclose here. It was our first interaction since probably last year, and I was just glad that he turned to me to talk about that problem (albeit the extent of that problem is in no way pleasing). Sunil, out of nowhere, started his own blog. He did also give me a nudge on Facebook yesterday, but I certainly did not expect him to be one of those who would eventually turn to blogging. Come to think about it, however, I realize that it should not be of any surprise given the fact that he was one of our few fine English debaters back then. What better way for a former debater to extend his arguments other than putting them into writings? Speaking of writing, I got a shock of my life yesterday when getting my daily dose of updates from theCICAK, as I discovered that the latest article on the website was contributed by none other than my good friend, Am. OK, I was more green with envy than shocked to be honest. I really did expect a man of his rank to someday be able to venture to such length, but I certainly did not expect it to be this early. Well, what does ‘early’ really mean anyway? Maybe I should change the definition in my own personal dictionary. Anyway, you get a bow low from me Am for that feat. Keep up the good work.

Moving on, I should be able to meet Lemi and Hasif at Brisbane come winter break. Too bad Maikel could not make it, or else it will be perfect. Zaim will come to Melbourne to start his degree next semester; that should add more excitements to this continent. I was a bit disappointed that Dino will not head down here too, but well, perhaps God has a better plan for him. Other than that, I still could not get rid of the thought of missing the chance to visit Syarel at Japan at the end of this year due to financial constraint. A good news, however, is that Que plans to come here for a short holiday in August before he leaves for UK. Let’s just hope that the plan will turn out to be a reality and I would be too busy come August.

I should end my writing here and go back to my course notes. The new oil price is certainly an excellent drive to study petroleum engineering now and do well in exams.

Curtain Falls

The final class of the week had just ended yesterday afternoon, marking the end of the first semester of my second year here in this university. For the first time ever, I had a bit of melancholy at the thought of wrapping up this chapter of my student life. Perhaps it is because we, the second year petroleum engineering students managed to get to know each other better this year than we did last year, so the thought of not being able to see those familiar faces again until the next semester begins does not really please me. I must say that the sessions we had during our Business Communication class, especially the part where we had to do presentations was particularly helpful in building the close rapport between us, since it was through those sessions that we managed to know more about other persons. I may not have managed to talk to each and every people in the class until now, but the idea of being in the same class with all of them was comforting enough. I will try to speak more and be a bit friendlier when we have a chance to meet again next time, I promise.

To say that I can now embrace freedom since the class had already ended is not quite right nevertheless. I still have to sit for finals exams which will start in about one and a half week’s time, plus another final assignment is not quite done yet. However between now and exams period, I shall take a brief moment to relax and try to regain my composure. It had been a hectic 12-week of class, with workloads amount so incredible that at one point I could barely sleep at night for fear that I may not be able to get to the finish line. Alhamdulillah, at the end of the day I still managed to make it here. All in all, I should say that this semester has been a revelation for me, as it helps to define to a huge extent this career path that I am taking. If last year I was still unsure whether this is what I want to do for the rest of my life, at this point of time those doubts are all but diminished, thanks to lessons I learnt both from and outside the class. I particularly enjoyed Reservoir Engineering and Business Communication classes, since both of these improved my vision of what petroleum engineering is, and also because they set the stage for a closer relationship between us through group and individual presentations, group discussions, etc. Contrastingly, Chemical Engineering Design is a total disaster, period. I am just glad that I did not choose to become a chemical engineer in the first place. As for my two General Education courses, both had been great in diverting my attention from the core subjects, though at times they managed to become distractions as well. I particularly enjoyed my Chinese lessons especially during the second half of the semester, presumably because that was when I started to grab some sense on that new language.

This might sound a bit early, but actually I am already looking forward for next semester. I miss maths badly, and thank God I will have a chance to learn maths again in the next semester. On another note, I am still contemplating on whether to proceed with my two other General Education courses that I have enrolled in, or to swap it with a professional elective subject. The idea of learning Microeconomics for elective sounds interesting, but continuing with General Education given Concept of Physical Fitness and World Religions as my current choice do not sound too bad either. Oh, did I say that I did also think of doing History of Mathematics? History and maths are both my favourite subjects, and what better deal can you get than a combination of the two? I shall try to make my decision within this few days before I start to get swarmed by the tension of finals exams.

We will have an end-of-session lunch cum gathering at one of the restaurants at Kingsford here today. The time arrangement does not quite do justice to me since it is close to the Friday prayer, so I might not be able to stay long. It is still a good way to bid farewell to everyone nevertheless, though most of us will still be able to meet one another when the next session comes.

Lessons From A Cab Driver

I went to Sydney University Village, Newtown this afternoon with some other friends for a Petronas scholars gathering. We decided to get a cab after the driver of the bus that we were supposed to take screwed up our 30-minute wait. Immediately after we got into the cab, I told the driver to drive us to SUV. I was not sure whether it was the anxiety of arriving late for the gathering, or the heat of tension caused by the long, futile wait for the bus, or simply the fact that I rarely ride a cab before, but I was half-expecting cab drivers to know each part of the region, exact locations where the passengers wish to go to. Maybe they are familiar with every road and where each of them leads to, but to know the points of thousands of places in a big city is a different story altogether and beyond logic, at least that was what I thought. All that put together triggered me to spontaneously ask the driver whether he knows where SUV is. He gave me this one look, and suggested that maybe I could show him the way. I said sure, just head down to Newtown and I would navigate him from there. Before I could add more he smiled at me cynically, and said, "I’m a cab driver, I know every part of this city!" before he burst out laughing. Hearing that, I sat motionless on the passenger’s seat and contemplated on that first lesson of the day.

That cab driver turned out to be a friendly person nevertheless; in fact that first treatment of his towards me was actually done in a friendly manner. Reacting to a conversation from the backseats, he asked me if we are from Indonesia. The first word that came from him upon discovering the truth was ‘Mahathir’. Our conversation went on and on as his cab glided towards Newtown, and I soon learnt that this kind man is from Ghana and like many other foreigners, came here to make a living. He talked about his admiration towards Mahathir, and how he wishes to visit Malaysia someday. Mahathir, he claimed, is his favourite leader and that led him to read a lot about Malaysia. Nothing was really surprising up to that point until he touched on the topic of palm oil and its importance to our country. Now, you feel proud knowing that someone like him knows so much about our country. However, having that conversation with that cab driver at the same time made me feel little. Now, do any of you know anything about Ghana? Well, apart from the fact that it is an African nation and Michael Essien of Chelsea is from there, there is not much else that I know. Lesson number two: a cab driver can sometimes be smarter than you.

Anyway, just before we reached SUV I took the chance to share with him what cab drivers in Malaysia are like. He commented a bit, and before long it was time to say goodbye. I paid the fare, thanked him for the ride and took that final chance to say that it was nice talking to him. It was indeed nice.