Cover Story: Why the 20% royalty for oil and gas-producing states is not a commercially viable proposal


Deadline 2020-12-19, The Edge:

THE 20% royalty or higher revenue share has for some time been the point of contention between the federal government and the oil-producing states, notably Sabah and Sarawak — which they claim they are entitled to under the Malaysia Agreement 1963 — and, to a lesser extent, Terengganu and Kelantan (which has yet to be recognised by the federal government as an oil and gas-producing state).

The federal government is of the view that the right revenue-sharing formula is clearly stated in the Petroleum Development Act (PDA), which was passed by parliament in 1974, and prior to that, it got the agreement of all states, including Sabah and Sarawak.

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