MANA ADA good news for OIL AND GAS??? Bohong bohong, is this reason MHB up up up, tax incentive???
02:10:41 PM 30-11-2010 November 30, 2010
KUALA LUMPUR, Nov 30 — Malaysia’s government today announced tax incentives to boost oil production and set out plans for billions of dollars in infrastructure investment as part of its bid to create millions of new jobs and double national income by 2020.
Malaysia is set become a net oil importer by 2012-13 and said it would cut tax rates for the development of new oil and gas resources and enhancing recovery from depleted fields.
“By lowering risks and increasing the rewards for (oil and gas) investment, this initiative will potentially lead to additional petroleum-generated revenue of more than RM50 billion for Malaysia over the next 20 years,” Prime Minister Datuk Seri Najib Razak told a news conference.
The tax incentives will cost the country RM8 billion in foregone revenues for state oil giant Petronas which provides almost half of all government revenues, Najib said.
Malaysia has become increasingly unattractive as an investment destination. Foreign direct investment here fell to just 3.8 per cent of the total flowing into Southeast Asia in 2009, down from almost 40 per cent in the early 1990s, according to United Nations data.
Najib’s earlier announcements that the government would generate US$144 billion (RM453.60 billion) in investments over the next 10 years, mostly from the private sector, were greeted with scepticism, although today’s firm numbers and tax changes were significant.
“The tax incentives are a big boost as currently Malaysia has 80 marginal oilfields that have not been fully utilised. This will be a boon for the oil majors currently invested in the Malaysia along with the domestic oil and gas service providers,” said Kaladher Govindan, head of research at Kuala Lumpur-based TA Securities.
Still, much of the investment will come from state-linked companies.
Electricity utility Tenaga Nasional , which is over 60 percent owned by state funds, is to invest 4 billion ringgit in hydro and coal-powered generating plants in central Malaysia in 2011.
Mainland Malaysia will soon start to run up against electricity supply capacity constraints by 2015.
A joint venture between Dubai’s Oilfields Supply Center Ltd and unlisted Malaysian company Tanjong Agas Supply Base and Marine Services will develop a 3 billion ringgit oil and gas hub comprising shipyards and storage terminals in Najib’s constituency in central Malaysia.
“These developments, new projects and foreign investment clearly demonstrate that out programme to transform Malaysia’s economy is working,” Najib said.
After a rocky period following elections in 2008 when the National Front coalition that has ruled Malaysia since independence from Britain suffered its biggest losses in national and state polls, losing its iron-clad two-thirds majority, Najib has appeared more sure footed.
Najib took office in 2009 after his lacklustre predecessor was ousted and has managed Malaysia through the global financial crisis and seen economic growth revive and surging prices for palm oil and rubber, key commodities exports in this Southeast Asian country.
He has staunched a series of by-election losses and looks set to call early elections in a move that could broaden support for his economic reforms.