Tom Kirkman

National Oil Company oil royalty payment delay tactics 101

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Summary (my understanding of this protracted dispute so far)

1. NOC owes oil royalty payments to an oil producing state in its country, for years.

2. NOC refuses to pay oil royalties for years due to a political dispute between the oil producing state and the Federal government.

3. Oil producing state sues NOC and Federal government for unpaid oil royalties.

4. Nothing happens in Federal court to get payment released, so the oil producing state decides to withdraw the suit because the NOC and Federal government promise to pay the overdue oil royalties if the suit is withdrawn.

5. NOC and Federal government do not show up in Federal court, which means the suit cannot be withdrawn.

6. Catch 22 for payment to oil producing state.  Cannot sue for oil royalty payment, cannot withdraw lawsuit in order to receive oil royalty payment promised by NOC and Federal government.

7. Successful delay in oil royalty payment by NOC is successful.

If my understanding above is incorrect, please do provide dox to the correct info.


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Just curious....

Why is the NOC willing to pay an additional, bonus, one-off dividend of RM 30 billion (USD 7 billion) to the Federal government this year, but is unwilling and/or unable to pay oil royalties overdue to one of the country's oil producing states?

Just curious....

Here's one of my comments on LinkedIn from a month ago about delayed payments ...

This delayed payment by Malaysia Oil & Gas Main Contactors to smaller Oil & Gas Sub-Contractors is RUINOUS to the Sub-Contractors and to the trickle down for the overall Malaysian economy.

Petronas, it is disingenuous to cop out an excuse by claiming you are unable to rectify this long-festering payment problem, due to contracts you signed with Main Contractors.  

As the National Oil Company, are you unable to exercise oversight of *your own* Oil & Gas contracts with your Main Contractors?  Blaming contracts that you signed with your Main Contractors doesn't cut it.

About 5 years ago, at a company I was working for, we had to arrange payment directly from the Malaysian Oil Company because the Main Contractor was unable to make milestone payments to our company.

Clearly, this Oil & Gas Main Contractor payment to Sub-Contractor problem is still not resolved.  

Excuses fall flat, after years of this late payment to Sub-Contractors happening continuously.


What O&G recovery? Subcontractors still not paid on time


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