Higher royalty versus state ownership of Petronas

May 12, 2013

Oldie but goldie: From the FMT, dateline 2013-04-30:

The oil royalty debacle is perhaps one of the popular components for both Barisan Nasional (BN) and Pakatan Rakyat (PR) as the nation approaches polling day on  May 5. In Kelantan, the “R” for “royalty” movement has in fact been proliferating, especially amongst PR supporters.

For years, we have seen the fight for royalty highlighted by the four producing states, namely Terengganu, Kelantan, Sabah and Sarawak.

While Kelantan continues with its ongoing battle for legitimacy of its claims under the Petroleum Development Act 1974, Sabah and Sarawak local dailies have been putting forth their plight for a bigger than 5% share over oil and gas incomes.

Government forms special committee to study oil royalty

December 5, 2012

Dateline 2012-11-20:

 The federal government has agreed to set up a special committee to conduct a fair and transparent study on the payment of cash from petroleum revenue to the east coast states of peninsula Malaysia, a statement from the Prime Minister’s Office said today.

It said the committee would be chaired by former Chief Justice Tun Abdul Hamid Mohamad and would comprise experts on international and local laws and representatives of the governments of Terengganu, Kelantan and Pahang as consented to by the sultans of these states.

The formation of the special committee is aimed at undertaking a comprehensive study on the issue of cash payment by taking into account all aspects raised by these east coast states, the statement said.


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.

RM7.2b oil royalty ‘rip-off’ for Sabah

November 3, 2012

Dateline 2012-10-17:

The RM7.2 billion received by Sabah for the past 40 years, being the 5% oil royalty payment under an agreement to extract the commodity from the state and its waters, is a major rip-off for the Sabahans, Kota Kinabalu MP Hiew King Cheu said today.

“The Sabahans’ demand for an increase in oil and gas sharing is understandable and this figure [of RM7.2 billion] is solid proof that the wealth of the Sabahan is exploited and being siphoned away.

“We did not enjoy the wealth provided by mother earth; instead we ended up with plenty of hardship, poverty, no development, and poor economy. Many other oil-producing countries are rich, but Sabah has remained a poor state,” he said.

He was commenting on Prime Minister-cum-Finance Minister Najib Tun Razak’s reply to a question raised by him in Parliament recently.

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.

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?

Terengganu drops Petronas suit

May 8, 2012

I say, What¿

Dateline 2012-04-23:

The Terengganu government has dropped its long-standing legal battle with national oil corporation Petroliam Nasional Bhd (Petronas) and the federal government over unpaid oil royalty payments amounting to several billion ringgit.

In response to queries from The Edge Financial Daily, Petronas said the Terengganu government had withdrawn its law suit on March 21 in “respect of the payment of oil and gas royalties”.

The oil corporation, Malaysia’s only Fortune 500 listing, declined to provide details of the settlement.

“We are not in a position to explain the settlement terms as these are under the purview of the federal government and the Terengganu government,” Petronas said.

No need Federal allocation if Sabah gets 50pc oil royalty, says Jeffrey

March 3, 2012

50% Royalty? Pleeze…

Dateline 2012-02-16:

Sabah State Reform Party (STAR) on Wednesday said that if Sabah were to receive 50 per cent oil royalty from Petronas, it would not even need Federal allocation to develop the state.

Its Deputy Chairman, Daniel John Jambun said this in response to a statement by Sabah BN Secretary Datuk Abdul Rahman Dahlan who said that Sabah would be compromised if Federal allocation or funds under the Malaysia Plan is reduced so as to pay the proposed 20 per cent oil royalty.

“Abdul Rahman forgot that under the Tenth Malaysia Plan (10MP), Sabah and Sarawak combined, are getting only about RM9 billion as compared to about RM100 billion for the Peninsula.

“At this rate of allocation, Sabah is actually getting less than RM1 billion per year throughout the five-year Malaysia Plan.

“As such, the Federal allocations are not much and hardly fulfil all the development needs of Sabah,” he said in a statement.