Kelantan would settle oil royalty suit out of court, says Husam

November 21, 2012

Dateline 2012-11-02:

 Kelantan is willing to settle its long-drawn oil royalty dispute out of court if Putrajaya expedites approval of the PAS state’s demand for RM800 million in annual royalties owed since 2005, state executive councillor Datuk Husam Musa has said.

Husam, who heads Kelantan’s Oil Royalty Action Committee, was weighing in on the government’s announcement on Tuesday promising a RM100 million payment to Pahang for untapped oil fields off the state coast.

“There is no more reason to refuse payment to Kelantan. I hope we can settle this out of court,” he told The Malaysian Insider earlier this week.

Khairy: Oil royalty hike affects tax collection, Petronas profits

October 30, 2012

Dateline 2012-10-01:

Demands for increased royalty to be paid to oil-producing states will cause both a drop in tax collections and profits for government-owned firm Petronas, Umno lawmaker Khairy Jamaluddin said today.

“We understand demands from states such as Kelantan but we have to think of the financial implications when we talk about increasing royalty,” the Rembau MP said in Parliament.

The Barisan Nasional (BN) and Umno Youth chief said it was “not so easy” as the tax collection from such states will be affected.

He also said that increasing the oil royalty will cause a drop in Petronas’s returns.

Dividends from the state oil firm currently account for over 40 per cent of the federal government’s revenue.

Kelantan gets leave to question Petronas over oil royalty claim

October 28, 2012

Dateline 2012-10-03:

After years of dispute, the Kelantan government is one step closer to resolving the long-standing oil royalty issue after the Federal Court today finally allowed the PAS-led state to ask state oil firm Petronas crucial questions on points of law related to its demand for payment.

A five-man Bench led by Court of Appeal President Tan Sri Md Raus Shariff awarded leave to Kelantan this morning as neither Petronas nor the federal government objected to the application.


NGOs to meet PM over Kelantan oil royalty rights

October 16, 2012

Suspicious, really? Noooooo…

Dateline 2012-09-22:

A coalition of pressure groups plans to hand the prime minister a petition over the Kelantan oil royalty issue carrying 150,000 signatures on October 3, the news portal Harakahdaily reported yesterday.

Early last month, Putrajaya set up a panel to resolve the long-standing issue that is expected to be a major campaign point for the PAS-led Kelantan state government in the coming general election.

The Kelantan government had previously been suspicious about the Najib administration’s forming of the oil royalty panel so close to the polls and asked for it to finish the probe in three months instead of the earlier planned six months.

On October 3, a convoy lead by the coalition calling itself “Royalti” will converge at the Federal Court in Putrajaya to pledge their support for a fair distribution of oil royalty to Kelantan.


Another ‘robbery’ of Kelantan’s oil wealth?

September 17, 2012
 Oh, please, what do you mean ‘claim’?
Dateline 2012-09-08:
Kelantan state exco Husam Musa has claimed that plans are afoot to build pipes to channel oil resources extracted from Bunga Kamelia zone in Kelantan to Kemaman in Terengganu.

Husam said starting next year, national oil giant Petronas would land gas in Terengganu, after extracting it from Block PM301 in Bunga Kamelia zone, which falls under Kelantan’s territory.

Embrace the spirit of Petroleum Development Act

September 2, 2012

Dateline 2012-08-15:

ONE of the topics that have dominated media space in recent days has been the oil royalty issue. Putrajaya has pledged to look into a mechanism that will ensure fair distribution of oil and gas revenue to producer states in Peninsular Malaysia. A special committee will be set up to carry out a comprehensive study, taking into account all aspects of the claims, and will make appropriate recommendations to the federal government.

The committee will be chaired by former chief justice Tun Abdul Hamid Mohamad and members will comprise legal experts from within and outside the country as well as representatives from the Terengganu, Kelantan and Pahang governments, according to reports.

With few details for now, one wonders why the committee’s scope covers only the eastern states of Peninsular Malaysia and not also the oil-producing states of Sabah and Sarawak. If that is the case — covering only Terengganu, Kelantan and Pahang — then would the original agreement that paved the way for cash payments for oil and gas discovered in the states, which was governed by the 1974 Petroleum Development Act (PDA), be more relevant?

Nik Aziz to seek audience with Kelantan Sultan over oil revenue

August 21, 2012

Is Lawit really in Kelantanase waters?

Dateline 2012-08-06:

Menteri Besar Kelantan Datuk Nik Aziz Nik Mat said he will be seeking an audience with the Sultan of Kelantan to get the Sultan’s consent on the state government’s choice to represent Kelantan in the Special Committee on Petroleum Revenue which was announced by Prime Minister Datuk Seri Najib Tun Razak today.

He said the Kelantan government had yet to make a decision as to who would be picked for the committee.

Petronas awards 3 North Malay Basin gas fields to Hess Corp

July 18, 2012

Isn’t this really outdated. How do I get onto this gravy boat?

Dateline 2012-06-21:

State oil firm Petronas signed three production sharing contracts with the exploration arm of U.S. firm Hess Corp on Thursday, kicking off a $5.2 billion gas project off Malaysia’s east coast.

The North Malay Basin project, comprising nine gas fields about 300 km (186 miles) off the east coast of peninsular Malaysia, is aimed at securing new gas supplies for Petronas as it faces a supply crunch.

Kelantan claims RM800m per annum oil royalty

August 2, 2010

Taken from the Malaysian Insider, dateline 2010-08-30:

The Kelantan state government claims PETRONAS owes the state RM800 million per annum from the Kelantan-Thailand offshore area since 2005.

The Kelantan government filed a suit today at the High Court here against the oil giant for breaching the Petroleum Development Act (PDA) 1974 by failing to pay the state oil royalties.

“The worth of condensate (gas liquid) comes to about US$8.5 billion per annum from the joint development offshore area with Thailand,” said state executive councillor Datuk Husam Musa.

“Five per cent of that belongs to Malaysia, which is RM1.7 billion. Half of that belongs to Kelantan which is RM800 million. Petronas owes Kelantan RM800 million per annum since 2005,” he added.

The Kelantan state government said today that Petronas owes the state oil royalties from at least four offshore areas from which oil has been extracted from. These are Kelantan, Kelantan-Thailand, Kelantan-Vietnam and Kelantan-Terengganu.

From Bernama – Oil Royalty, Kelantan Not Eligible Because Of Emergency Ordinance

March 17, 2010

Taken from Bernama, dateline 2010-03-11:

KUALA LUMPUR, March 11 (Bernama) — Kelantan is not entitled to claim oil royalty outside its territorial waters because the Emergency (Essential Powers) Ordinance 1969 is still enforced, said a law practitioner.

Datuk Mohd Hafarizam Harun said provision No.7 of the Ordinance stipulated that the state’s boundary which is the state’s land mass and its territorial waters stretched three nautical miles measured from the low-tide water mark.

However, two oil wells disputed by the Kelantan state government are located outside the ‘area’.

“To my knowledge, the Emergency (Essential Powers) Ordinance 1969 is still in force and has not been abolished by the government. In fact, there are Ordinances formulated at that time, such as ESCAR (Essential (Security Cases) Regulations 1975), which are still in force,” he said when contacted by BERNAMA, here Thursday.

He was commenting on the statement by former Sarawak chief minister Tun Abdul Rahman Yakub, who supported the stand of the Federal Government that the State Government was not entitled to claim the oil royalty unless it could prove that the state’s territorial waters exceeded three nautical miles.

And here’s more fuel to the fire.