Published June 26, 2009

Board defers request to appoint Najib aide

By S JAYASANKARAN
IN KUALA LUMPUR

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THE board of Petroliam Nasional, or Petronas, has deferred a request to appoint Omar Mustapha, a key aide of Prime Minister Najib Razak, to the board of the national oil corporation.

According to oil industry officials, the decision to defer Mr Omar's candidacy was made on Wednesday after the board met to approve the oil firm's financial results for the year.

The officials said that the board wanted to personally explain its position to Mr Najib who had made the request in the first place.

Previously the board had rebuffed Mr Omar's candidacy on the grounds that he had defaulted on the conditions of scholarship given to him by Petronas more than 20 years ago. Mr Omar, 38, had served in the oil firm only briefly before leaving for higher studies overseas - a move that, theoretically, left him in breach of the provisions of the scholarship.

According to an earlier news-report in The Straits Times, Mr Najib had asked the board to reconsider its position on Mr Omar's candidacy. Given the board's latest position on Wednesday, it appears that it remained unmoved.

The oil firm's seemingly uncompromising position on the matter symbolises the relative independence of its board, a characteristic that has been a hallmark of Petronas since its inception since 1974, The tradition has been carried on by its current chairman and chief executive Hassan Merican.

Mr Hassan, however, declined to comment on the matter when asked during a media briefing on the oil firm's financial results.

The initial reports that Mr Omar, one of the premier's key advisers on economics and finance, was to be appointed to Petronas's board first appeared in several prominent blogs and was harshly criticised by various commentators.

Even former prime minister Mahathir Mohamad, who is an adviser to Petronas, got into the act when he criticised the possibility of Mr Omar's joining the board saying it wasn't a good idea to have political appointees on Petronas's board because they 'might have a different agenda'.

Mr Omar, an Oxford-trained economist, worked in Petronas briefly before joining McKinsey and Company where he served in London and Kuala Lumpur. He then founded Ethos, a consultancy company in Kuala Lumpur, before joining Mr Najib as a special assistant.

When the news first surfaced on the blogs, it was speculated that Mr Omar was being groomed for Mr Hassan's job because the succession plans for Petronas remain unclear.

Mr Hassan's contract expires in February and, according to market speculation, he could be replaced as the oil firm's chief executive but would retain his chairmanship. But given his deft management of Malaysia's most profitable company, his would be a very hard act to follow.