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This article first appeared in The Edge Malaysia Weekly, on February 8 - 14, 2016

DATUK Mohd Anuar Taib, senior vice-president for upstream business at state-controlled oil company Petroliam Nasional Bhd (Petronas), is likely to be moved up to executive vice-president and CEO for upstream business, taking over from Datuk Wee Yiaw Hin, when the latter steps down in April, industry sources say.

It is understood that Petronas’ board approved a few changes and appointments, including Anuar’s taking over of Wee’s position, a couple of weeks ago, but it has yet to make any formal announcement.

“His (Wee’s) decision to leave is not a surprise. He has made it clear for some time now that he wants to leave once his tenure is up … he (Anuar) is the obvious choice actually,” a source tells The Edge.

There are other changes as well but not as significant as Anuar taking over from Wee. Among those discussed is Sharbini Suhaili, vice-president for production, being transferred to health, safety and environment.

“The appointment of Anuar as executive vice-president and CEO for upstream makes him literally the No 2 in the company,” an industry source says, explaining the importance of the appointment.

Wee, 58, joined Petronas after holding senior management positions in both Shell and Talisman. In Shell, Wee was vice-president, Malaysia, for Shell Upstream International Asia, and managing director of Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd.

Ironically, Anuar, who turns 48 this year, succeeded Wee at Shell when the latter retired in September 2009.

Wee was brought in by former Petronas president and CEO Tan Sri Shamsul Azhar Abbas, who helmed the oil and gas company from early 2010 until February last year.

Shamsul had taken a lot of flak appointing Wee, as pro-bumiputera groups questioned the appointment, suggesting that a Malay should have been appointed instead.

Anuar had joined Shell as a graduate in 1990 and was appointed a wellsite drilling engineer in Miri, Sarawak. During his almost two decades with Shell, Anuar worked in its offices in Miri, Kuala Lumpur, and New Orleans, among others.

With the new appointment, Anuar will be working closely with president and CEO Datuk Wan Zulkiflee Wan Ariffin.

Interestingly enough, both, together with Datuk Ahmad Nizam Salleh (managing director and CEO of Petronas’ 80%-owned unit, South Africa-based Engen Petroleum Ltd) and Md Arif Mahmood (senior vice-president for corporate strategy and risk) were shortlisted for Petronas’ top post when Shamsul stepped down in February last year.

Back then, Anuar was perceived to be too young to take the reins at Petronas and Wan Zulkiflee, who is now 55, was the preferred candidate. This would also indicate that Anuar is likely to be the next head of the oil company when Wan Zulkiflee eventually steps down.

While Wan Zulkiflee may get an extension, his contract is for three years, commencing from April last year.

Both Wan Zulkiflee and Anuar will be tasked with taking Petronas through the current slump.

For its nine months of FY2015 ended September, Petronas posted an after-tax profit of RM24 billion, a 57% drop from the previous corresponding period. Revenue came in at RM188 billion, compared with RM250 billion previously.

The company registered a net loss of RM565 million in the third quarter of 2015, compared with a net profit of RM12.4 billion in the previous corresponding period, as a result of impairments brought about by lower crude oil prices.

Reports have it that excess output, which is estimated to be a minimum of one million barrels a day, has been going on for 18 months, resulting in oil prices being dragged down to a 13-year low of around US$27 per barrel in end-January. At about US$30 a barrel, crude oil prices have tumbled more than 70% over the past 1½ years.

Despite the slump, Petronas is still slated to pay the government RM16 billion in dividends this year, albeit lower than the RM26 billion paid in 2015.

In 2011, Petronas had committed to spend RM300 billion in capital expenditure over five years or until 2015, which works out to RM60 billion per year. But this was made based on an oil price assumption of US$80 per barrel.

While details are scarce, internal memos from Wan Zulkiflee have been circulated via online sources. They indicate that the oil company is planning to slash as much as RM50 billion in capital and operating expenditure over the next four years.

In a nutshell, it looks like Wan Zulkiflee and Anuar will have their hands full in the coming years.

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