After Omar Ong, Syed Hamid rumoured for Petronas Chairman?

If last week saw Omar Ong being appointed on the Board of Director (BOD) of Petronas, the Kuala Lumpur City Centre is a buzzed with rumours that former Minister, Dato Seri Syed Hamid Albar will be appointed as Chairman of Petronas.

These two appointments are not expected to go down well with the public and corporate circle. If the two appointments are publicly announced, it could come at an expensive political cost to Najib, whose first 100 days as Prime Minister thus far has not brought in the profound boost hoped by UMNO members.

Since its establishment by Tun Abdul Razak in 1974, Government has always maintained an unwritten rule for Petronas management to be free from any direct or indirect political interference. Petronas have since been professionally run and this has proven to be a successful formula.

Members of the Board of Director of Petronas have been limited to Government officials represented by the civil servants and top executives in Petronas for their professional input on the oil and gas. (See the current line-up here.)

The only exception being Tan Sri Ananda Krishnan, who was invited by the Government to help established Petronas. He was brought in by the then Chairman of Petronas, Tengku Razaleigh Hamzah for his expertise as an established player in the regional oil and gas trade.

The presence of former Minister, Syed Hamid as Chairman and Omar Ong as member of the Board of Directors will not auger well for Najib's public image.

Words are that the justification used to appoint Syed Hamid is his experience as Foreign Minister. This is felt by many observers as odd since the international relation role will be better served by the current Petronas Adviser, Tun Dr Mahathir Mohamad.

Dr Mahathir commands a strong respect in the Middle East and Third World countries. Petronas overseas ventures came about during his premiership.

Syed Hamid will come with the burden as the Foreign Minister that failed to defend Batu Putih from Singapore’s claim. He was alleged to be involved selling sand to Singapore that becomes a factor in the cancellation of the scenic Johor Bridge. Furthermore, he does not have good personal relations with leaders of Arab countries

The perception of the few Petronas executives spoken on Omar Ong’s presence were generally negative.

He will be perceived as “the voice of the Prime Minister” and this will exert undue influence on the other members of the Bord of Directors, particularly the representatives from the various Ministries. This could invariably lead to Omar Ong directly interfering in operational matters of Petronas.

Petronas has been successful because it was able to carryout it’s policy and implement it’s plan without interference from external parties. It’s system and procedures of check and balance is in place and working well. There is no need for interference, real or perceived, from other power at be.

The last Petronas need is interference from it’s former scholarship holder with limited working experience in and purely textbook knowledge of the oil and gas industry.

Other than Petronas, another organisation that has proved successful with a “no political interference policy” is Permodalan Nasional Berhad. The Board of Directors of PNB is limited to distinguished former high Government officials.

The economic and social contribution of both Petronas and PNB is too invaluable to the nation. Thus, it is important that such institutions be protected and run by capable and experienced professionals with governmental playing the policy monitoring role. It should remain a "taboo" for politicians or political representative to be in the management of both organisations.

Petronas is increasingly dependent on international business. Thus, it can’t afford to tarnish its unblemished record with ‘amateurish’ mistake and god forbid, a financial scandal. The risk is too high to give the top positions in Petronas in the hands of inexperienced young wannabees and popularity motivated politicians. This could be an expensive political cost to the Prime Minister.

As it is, Najib should remain focus to turnaround the economy in order to regain public confidence to the party. He does not need to take unconventional decisions that will detour him from regaining the trust and confidence of the public.