Last Updated: 3:25pm, Dec 17, 2013

PETALING JAYA (Dec 17): Pandan MP Rafizi Ramli wants Prime Minister Datuk Seri Najib Razak and former Petronas advisor Tun Dr Mahathir Mohamad to answer why the government-linked company (GLC) spent RM15.8 billion on a gas reserve deal which was comparatively much higher than deals by other oil and gas companies.

The deal in question was Petronas's purchase of shale gas reserve in North Montney, Canada from Progress Energy for 316.67 million barrels. USD5,200 million was paid for the deal.

Rafizi explained that each oil and gas block deferred from another and the common denominator to gauge the average appropriate price was through the price for each barrel.

He then drew parallels with another deal for oil reserve by Malaysian company Hibiscus Petroleum and 3D Oil for a block in Australia. The deal was worth USD29 million.

"That comes to USD7.02 per barrel. But in the case of the Progress Energy deal, the price per barrel is almost twice the amount which is USD16.42 per barrel," he said.

Rafizi, who served in Petronas for seven years and was also involved in acquisition projects for the GLC explained that shale gas reserve like the one with Progress was suppose to be priced even lower as the buyer would have to further invest a lot more than the purchasing price to get the natural gas.

"I believe that the deal was not made based on commercial considerations alone. It is like the 1Malaysian Development Board (1MDB) which paid more than the market price to purchase low value electric generator assets from IPP when their concessions were almost over," he said.

The PKR strategic director added that he was worried that the deal with Progress Energy was influenced by "hidden hands" for certain quarters to make profit.

He said that Najib and Mahathir should comment this deal.

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