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NEWS UPDATES 1 April 2010

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Malaysian oil company Petronas Cambodia Co Ltd will quietly withdraw its business from Cambodia next month, becoming the second oil supplier to leave the country in recent years, the Phnom Penh Post reported, quoting a local company staff member.

“We were extremely shocked when the company told us that they would withdraw investment in Cambodia from next month,” said the staff member, who asked not to be named.

In an internal memo sent from Petronas’ 29 Cambodian staff members to management in November, employees said they were disheartened to hear the news.

“We know that Petronas Cambodia Co Ltd was not making any profit for the past several years, but in recent years we have turned around the company from making losses to breaking even, and this year we are making a profit,” they wrote. “We hope that in the future we will do our best to make more profit for the company.”

The staff memo requested $5,000 per person for “pocket money” on top of six months’ severance required by law, “so that some of our staff can do some small business for their living”. Some staff told the Post that Petronas paid some employees Monday $1,000 each by cheque. Others had been paid more, they said, but less than the requested $5,000.

The Petronas withdrawal follows the exit of Shell Co in 2007. With the Petronas exit, Cambodia will now have 11 petrol distributors.

Petronas opened in Cambodia in 1994 with 19 stations, but these gradually dwindled to one, the staff member said.

Total assets for the Cambodian branch of the Malaysian national company stood at $7.5 million, including an oil-storage facility in Samrong Thom commune, Kean Svay district, Kandal Province.

Petronas has sold its assets and licences to American Lube Co Ltd, a local oil dealer, the staff member said.

Petronas had undertaken wholesale and power plant supply but sales dropped consistently, from 10,000 tonnes per month in 2006 to around 2,000 tonnes a month today, the staff member said.

An engineer at the company said Monday he was not aware of the pullout, but he confirmed the sale of assets to American Lube.

“It may be just changes from foreign management to Cambodian management in order to create more business effectiveness,” he said.

Jalaludin Omar, CEO of Petronas Cambodia, and Ngy Iem Tiong, president of American Lube, could not be reached for comment Monday.


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