OIL AND GAS INDUSTRY NEEDS TO UNDERGO STRUCTURAL REVAMP

KUALA LUMPUR, June 6 (Bernama) -- The oil and gas industry needs to undergo
a structural revamp to keep fuel prices low for its benefit and that of
consumers.

"Players in the industry need to have more collaboration on a level
playing field as well as compete at the same time," said Performance Management
and Delivery Unit (Pemandu) Chief Executive Officer Idris Jala in a special
address delivered at the 16th Asia Oil and Gas Conference opened by Petronas
Chief Executive Officer Shamsul Azhar Abbas here Monday.

He said there were more opportunities for industry players to collaborate,
such as, in the sharing of storage and facilities, that could generate
further cost reduction hence offering cheaper fuel products to consumers.

Later at a panel discussion, Idris said the world has to wake up to the fact
that its needs fuel and there was a price to pay for it.

"I think many economies today do not put a real price tag on fossil fuel,
which makes it difficult for further work to be done in other different
industries.

"Subsidies have to go and Malaysia has begun a process to wean off the
public from subsidies," he said.

Idris also said subsidies would take a toll on government expenses and if
debt rose to more than 50 per cent of the state's Gross Domestic Product (GDP)
coupled with a deficit of more than 10 per cent of its GDP, governments would
crumble, citing Greece as an example.

"One of the biggest way to reduce government debt is to reduce subsidies and
when governments borrow money for investments, it fuels growth, but if the
borrowing is for operating expenditure, it will be detrimental to the country,"
he said.