& Associates – Dato’ Mohd Ali, Senior Partner – Malaysia
Senior partner at Azmi Associates and Cliq Energy’s Chairman discusses Malaysia’s legal framework, its attractiveness for foreign investors and speaks about Cliq Energy; a special purpose acquisition company (SPAC).
In your view, how has the Malaysian legal system changed over the course of the country’s petroleum history?
Malaysia has evolved from a very nationalistic country to become a far more progressive nation. Foreign ownership, for example, was limited in certain sectors, where they were generally closed to foreign investors. Moreover, regulations were very restrictive in any domain related to non-Malaysian citizens. However, the Malaysian government has further liberalized the economy to attract more foreign investment and bring more professionals and technology into the nation. As a result, a 100 percent foreign ownership in local companies in sectors including upstream oil and gas, information technology and manufacturing is possible today. This has brought about a huge change in Malaysia’s business environment.
Speaking about facts and figures, 30 percent of our firm’s revenues come from foreign clients annually. We have represented more than 400 foreign companies mostly from the US, including Fortune 500 companies that are investing in Malaysia. The O&G business has definitely become one of our biggest annual percentage growth. The considerable expertise and experience of our solicitors in the energy sector have been established in advising numerous clients on matters ranging from power supply agreements, foreign IPP projects, sale and purchase of dry gas, relocations of turbines, foreign LPG projects, concessions and privatization to district cooling and co-generation systems.
How do you rate the government’s commitment to foster the right environment?
Malaysia desires to be a nation with a friendly business environment for foreign investors and local companies alike, and this business-friendly context is the main goal and commitment from our Government. Generally speaking, our Government has always been cooperative in helping foreign investors, with the Government’s efforts to foster the right balance to consolidate the perfect business environment. We are in a position to help foreign investors to try and find a Malaysian partner as such collaboration will bring nothing less than success.
You have also been working as a lawyer (in-house) at Petronas. What has this experience taught you about what E&Ps need in an outsourcing partner, and how does Azmi & Associates respond to those needs?
Petronas tends to do its legal work internally, even until now—all domestic work has been done in-house. As such, there has not been that much knowledge acquisition by practising lawyers in the context of Malaysia.
When I first joined Petronas in 1984, Petronas was a relativity small company. It employed “only” 3,000 people at that time. It was only in the mid 1990s that Petronas expanded internationally. In fact, when I left Petronas the company was about to start its first overseas venture in Vietnam in 1994. Petronas continues to use its in-house team for domestic legal work, but, when it comes to overseas investments, they will work with big international law firms.
It should be noted that Petronas has become a very sophisticated corporation, being the world’s sixth most-profitable Fortune 500 company.
Besides being one of the “hottest” M&A lawyers in the country, you are also serving as non-executive chairman of Cliq Energy Berhad, an (E&P) company specializing in the acquisition and development of oil and gas assets located in Asia and Oceania. Could you tell us more about Cliq Energy?
Cliq Energy is a special purpose acquisition company (SPAC), essentially a shell company raising funds from the capital market for the purpose of acquiring businesses covering various industries, including the oil and gas industries. Cliq Energy was the country’s second listed SPAC in April 2013—we raised MYR 370 million (USD 113 million).
Malaysian SPACs are given three years to secure a qualified asset or 90 percent of the IPO proceeds must be returned to investors. At Cliq, we will focus on small and medium sized discovered oil gas fields with relatively low to moderate risks, as well as pursue opportunities in the development and production of other oil and gas fields.
Can you elaborate on the key targets and expected results?
We have more than 50 assets already identified by us and/or proposed to us since the listing of the company in April 2013, and, currently, we are looking at two new assets to acquire. I personally think that the numbers speak for themselves.
What do you think is the image of Malaysia outside of the country?
The nation is trying very hard to be a more open country, although, at the same time, some policy makers consider it appropriate to still have some certain degree of control of what is happening across the country. The national leadership is aware that international integration of Malaysia’s economy is important and this explains the push to foster the right environment for international investors to come and invest here.
Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. As a matter of fact, Malaysia is together with the Philippines the fastest growing country in the region. For the first half of 2014, Malaysia’s GDP expanded by 6.4 percent from 4.4 percent a year ago. The image of Malaysia is better than ever.
What message would you like to send these international investors about the Malaysian oil & gas industry?
There are still a lot of opportunities in Malaysia. We are becoming a modern economy, and we are opening our door to foreign talent. Today, Malaysia is more competitive than ever, and it’s the perfect time to be here. The future of our country is extremely bright.
To read more articles and interviews from Malaysia, and to download the latest free report on the country, click here.