Page 12 - AsianOil Week 38

AsianOil
SOUTHEAST ASIA
AsianOil
The company’s first-half oil and gas output climbed slightly to 2.42mn barrels of oil equivalent per day from 2.38mn boepd in the same period of 2018. The company said that higher natural gas production from its projects in Malaysia had par- tially offset by its lower crude production in Iraq. The Malaysian firm owns a 45% stake in Iraq’s Gar- raf oilfield, as well as smaller stakes in the southern Halfaya and Badra concessions.
The company noted that it had brought 11 projects on stream in the first half, adding 63,000 boepd of production. These consisted of nine brownfield developments in Peninsular Malay- sia, Sarawak, Iraq and South Sudan, as well as a greenfield project in Sarawak and an unconven- tional project in Argentina.
In terms of the second half, the company said the oil and gas market was likely to remain
“volatile” owing to global trade disputes, sluggish oil demand growth and a slowing global econ- omy. Noting that nationalism was “expected to remain at the fore”, the company warned that protectionist policies would pose challenges to its year-end performance.
Commenting on these market pressures, president and CEO Tan Sri Wan Zulkiflee Wan Ariffin said: “Our growth journey will continue to be guided by our three-pronged strategy and we will progress with our efforts to build the organisation’s resiliency [sic] in facing antici- pated prolonged market volatility and changing energy landscape.”
One bright spot is that the Pengerang Inte- grated Complex (PIC) is on track to begin com- mercial operations before the end of the year, with work being 99.7% complete as of June 30.™
Trader rejects Mitsubishi’s account of losses
PROJECTS & COMPANIES
A trader that worked at Mitsubishi’s Singapo- rean arm until last week has disputed the Japa- nese company’s version of events surrounding a $320mn loss on crude oil derivatives trades.
Mitsubishi said on September 20 that the loss had arisen from unauthorised trades at Pet- ro-Diamond Singapore (PDS). It claimed PDS had discovered the losses during efforts to locate the trader – later revealed as Wang Xingchen – after he failed to return to his desk following a holiday in August.
Mitsubishi said Wang had handled crude oil trades for China and “was discovered to have been repeatedly engaging in unauthorised derivatives transactions and disguising them to look like hedge transactions since January of this year.”
It added that PDS had closed the positions after it discovered them and was “examining the total amount of losses”. The trading giant said the trader’s contract had been terminated on September 18 and that the matter had been reported to the local police.
Wang’s lawyer Joseph Chen, however, told Bloomberg on September 25 that the trades had been conducted with the full authorisation of Wang’s managers and that PDS had fired him over the losses themselves. Chen said the losses
were the result of the company’s “premature” set- tlement of the derivatives positions.
The lawyer added that his client had followed company policy at all times and PDS’ finance team had reviewed his trades. “Internal controls were in place,” he said.
Chen also disputed Mitsubishi’s claim that his client had vanished from work, saying that Wang had taken medical leave in August following a vacation. Wang is now refusing to reveal his cur- rent location out of personal safety concerns, his lawyer said.
Mitsubishi told Bloomberg that it had con- ducted an internal review of PDS and, while controls were deemed to be appropriate, it had tightened governance to ensure earlier detection of similar “improprieties”.
“It’s a bit surprising [because] in the Japa- nese houses there are a lot of checks and dou- ble-checks but I’m not sure what automated compliance systems there are, or if they have any,” Reuters quoted an unnamed trader as say- ing on September 20.
Mitsubishi has said it is still unclear how much of an impact the trades will have on the group’s bottom line for the year to March 30, 2020.™
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w w w . N E W S B A S E . c o m Week 38 25•September•2019