KUALA LUMPUR (Asia) – The chief of Malaysian energy firm Petronas quit this month following disagreement with the prime minister over giving more oil money to one of the country’s states run by a government ally, government sources said.
Extra funding would hit Petronas and the national budget at a time the novel coronavirus has triggered the slump in oil prices. It could also raise questions over the management of state finances as Malaysia seeks to rebuild its reputation following the international scandal over state fund 1MDB.
Petronas Chief Executive Wan Zulkiflee Wan Ariffin stepped down after a disagreement with Prime Minister Muhyiddin Yassin over a plan to pay $470 million (£377 million) in sales tax to Sarawak, five sources close to the government and the company said.
Wholly state-owned Petronas is the Southeast Asian country’s only Fortune 500 company. It is the world’s fourth-largest exporter of liquefied natural gas and had revenue of $56 billion in 2019, but profit fell 68% in the first quarter of 2020.
Petronas had been opposing Sarawak’s demand for the sales tax in court before the two parties announced a settlement last month – although Sarawak later said it would continue legal action until an agreement is final.
“Wan Zul resigned because of principles, that he is not agreeable to the Sarawak deal,” said a source, referring to Wan Zulkiflee.
“The new government is open to giving more to the states that produce oil.”
Wan Zulkiflee declined to comment. The prime minister’s office and Petronas did not immediately respond to requests for comment.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field