Preparing for trip to France

I have never been to France even though one of my sisters is married to a French guy. This is due to the fact that they are both Australians now. Anyway, sometime back we received a great offer from one of our friends to stay in her apartment in the beautiful city of La Rochelle in Western France. Of course we jumped at the chance. We met her today at the Coventry railway station before she left for her house in Paris and she handed over the keys to the apartment.

Malaysian are lucky because they don't need a visa to enter France, unlike citizens of other countries outside Europe, including Indians and Chinese among others. I am really excited as this is going to be my first trip to anywhere in France. However, I have to admit that I am a bit worried as well. We plan to drive there and the kids will be there with us. A major concern is that we will be driving our old Ford Escort and the place is nearly 645 miles from our house here in Coventry.



The car has never given me any major trouble till now and I would have to send it to a work shop for a complete servicing to ensure that we have a smooth journey to and fro. I would need to fix the air conditioning as well because it's going to be quite warm there.

Some friends have been advising us to learn some French - the most important being, "Parlez vous Anglais ? (pronounced as Pahr-lay voo ah(n)gleh ?) meaning, "Do you speak English ?"

Well! I have one month to prepare for the trip.

Roses in Bloom

My Valentine's day roses are blooming again and isn't that colour wonderful. I have to say that roses are my favourite flowering plants for a number of reasons. First of all, the flowers are sweet smelling. They last long as well and the plants flower several times in a year. You also don't have to replant them every year as I have to do with some of my other flowering plants. Last of all, they are quite hardy and easy to propagate as well.



The two hybrid tea roses (one with yellow flowers and another with orange flowers) I bought at a car boot sale last Sunday are doing great as well.

My Green Thumb Sunday post this week.
Join

Do visit As the Garden Grows for more information.

Letter from a Petronas employee

Following the fuel price hike in Malaysia, one company in particular has become the target of the furious Malaysian public. The Malaysian oil company - Petronas. Some have even called a boycott of Petronas as a protest against the fuel hike.

Anyway, I recently received this forwarded email from a Petronas employee. SO what do you think?

-------

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 in the last 33 years. 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.

Neighbour's house burgled

Today evening we were sitting in the living room entertaining my wife's cousin who had just arrived from Newcastle, when there was a knock on the door. I opened it up to find a cop standing at our doorstep.

Apparently one of our neighbour's house two door's away, had been broken into. I guess it had happened while we were away in Nottingham. The policeman wanted to know whether we had seen anyone acting suspiciously. I replied in the negative and I was shocked to learn that something like this had happened in our neighbourhood, and in fact right next door. The burglars had entered the house though the back door which had been left open. The officer took my name and contact number, not sure why.

Left me wondering whether the burglars had gone around trying the doors of different houses. They might have even tried ours as well. Quite a scary thought even though we don't have anything worth that much in our house. I am definitely going to install one of those motion detector spotlights at the back of our house asap.

Empty Coventry Ikea store

Just got back from Nottingham where I had spent the night together with the wife and kids. Had a wonderful dinner yesterday at our friend Amrul's house. Not many guys like cooking but it's a fact that some of the best cooks are men. Amrul happens to be one of them. He loves cooking. He has a nice kitchen fully furnished with Ikea furniture in the house he's renting. Our small kitchen looks terrible in comparison.

Talking of Ikea, we visited the huge Ikea store here in Coventry on Tuesday. Both my wife and I, are long time Ikea fans and if we had the choice (and money), we would equip the entire house with Ikea furniture and stuff.

Anyway, when we entered the store, we were shocked when we found that there was absolutely no one around - not even the store employees. It was like we had the entire store to ourselves. We did get to see a couple of other customers after a few minutes. But having got used to crowded Ikea stores in Malaysia, it was a big surprise. Made me wonder whether the Coventry store is making any money at all.

We also decided to try out the food here. The food was great and quite cheap. Reminds me of the days in Malaysia when we used to go to the Ikea store for food.

We had wanted to grab a few items but like usual ended up with a whole shopping cart load of items. Looks like more DIY time for me.

MCS BBQ 2008

The Malaysian Coventry Society organised a BBQ party at Draycote Water Country Park last Saturday. We were supposed to bring some kuih-muih (snacks) but we were too lazy too cook and bought some chocolate cakes from Morrisons instead.

Being a vegetarian, there was not much I could eat but it was nice to meet up with other Malaysian families. My daughter made some new friends as well. My son was happily running around and I realised I haven't taken him out to any parks for a while. However, I had a tough time keeping him away from the BBQ fires. He was fascinated with the smoke and the sound of all the sizzling meat.



I had wanted to explore the park before going back home but the heavens opened up and we rushed back home. Maybe some other time.

Here are some pictures:

Fuel prices stink

Fuel prices in Malaysia is set to rise from RM 1.92 ringgit to RM 2.70 (£0.425) a litre while in India it has increased to Rs 47.49 (£0.57) a litre (an increase of almost 5 rupees). Read the report in the International Herald Tribune here. Petrol prices are heavily subsidised in both countries.

Over here in the UK the prices are determined by the market. Got the shock of my life when I saw the prices at the nearby Texaco station near my house this morning - 116.99p. It is the highest since we arrived here in the UK.

As a student here, I am definitely feeling the pinch. As much as I would like to, I simply can't reduce my dependence on the car. I use it to send and pick up my kids from the nursery. We also have use it to go to the University. Of course public transport is always an option but we have to change two buses to get there, taking almost 40 minutes of our precious time and a day saver ticket costs £2.60. In the end, it is cheaper to take the car.

However we are resigned to it as it doesn't look like the fuel prices are not going to come down anytime soon. It might not even come down at all.