Petronas Secures Oil Interests

21 Feb 2013

Malaysia's Petronas is going far and near to secure its oil and other resources. If the other day Kualalumpur had raised an international issue with Canada over the denial of an oil deal to the Petronas, the company today has granted a US$700 million six-month deferred payment facility to Bangladesh Petroleum Corporation (BPC) over a period of six months. Malaysia has also undertaken offshore repairs to a Shell platform in the South China Sea, which is rather sensitive issue for China.

But owing to agreements for collaboration, Beijing has not made it an issue. In other words, Malaysia is securing its oil interests diplomatically and otherwise in keeping with its growing stature as a nascent developed country.

Under the deal with Bangladesh, the first month debt rescheduling will be interest-free and the next five payments will have a rate of 4.5% interest. Previously, the debt carried an interest of 5.05%.

The State-owned BPC, Bangladesh's heavily subsidized sole oil importer and distributor, buys its oil on credit and sells it to the domestic market at much lower rates than the import prices. Apparently, Malaysia is going to play a big role in helping Bangladesh with oil exploration.