“THE SABAH government should
take this golden opportunity to demand and sign a new and better oil agreement
with Petronas and the federal government,” said Datuk Dr. Jeffrey Kitingan,
Chairman of STAR Sabah in response to the statement given by the Chief Minister
that the State’s 5% petroleum royalty review issue is open for amicable
discussions with the federal government.
“If the Chief Minister is
truly a Sabahan at heart, this is the most opportune time to not only seek a
review but to demand and negotiate a new deal for Sabah’s oil and gas resources
for the benefit of Sabah and its future.
It cannot be denied that any increase in the oil revenue including the
offer of 20% by Pakatan Rakyat is definitely for the benefit of Sabah and
Sabahans” added Dr. Jeffrey.
The old oil agreement is
nearly 4 decades old and a new oil deal is certainly needed for the future of
Sabah. The so-called review will also
test the sincerity of the federal government and the Sabah leaders as well as
the extent of the federal-state relationship.
The
battle for Putrajaya to be decided in Sabah and Sarawak
In addition, it is important
to realize that the seat of government in Putrajaya is now likely to be decided
by Sabah and Sarawak. Therefore, the Sabah and Sarawak leaders must leverage on
their role as kingmakers.
Sabah and Sarawak leaders
must ensure that the rights and interests of Sabah and Sarawak come first. And, if the federal government does not agree
to increase the share of oil revenue for Sabah and Sarawak, the Sabah and
Sarawak leaders, as kingmakers, should just change the federal government.
The State government should
also adopt a holistic approach to the old oil agreement in seeking a new
deal.
Oil
Agreement Unconstitutional?
Many are of the opinion that
the existing oil agreement is unconstitutional and invalid because it is not
only unfair but infringes on a fundamental state rights. They also question the authority and the
manner of the then Chief Minister in signing away the oil rights without
approval from the State Legislative Assembly. The terms of the agreement are
not only loop-sided but grossly unfair to the oil-producing states.
5%
Not Oil Royalties
The Chief Minister also need
to better understand the existing oil agreement.
Firstly, the current 5% is a
cash payment payable by Petronas under Section 4 of the Petroleum Development
Act, 1974 in return for the ownership and the rights, powers, liberties and
privileges of the oil and gas resources vested to Petronas by the State and is
not royalty at all. Furthermore, Section
4 provides that the cash payment is to be agreed between the parties, and not
imposed upon.
There was unlikely to have
been any negotiations in 1976 for the amount of the cash payment. If it had been properly negotiated, it would
not have ended up at a mere 5% for transfer of ownership of the oil and gas
resources to Petronas. In fact, the
then Chief Minster had recently stated that the State was forced to accept the
5% cash payment.
Secondly, very few people
know that in fact under Clause 4 of the 1976 agreement that was signed 8 days
after the Double Six Tragedy, the State government was also asked to agree to
waive or to reject Sabah’s rights to royalties on the oil and gas resources.
Therefore, in the new deal,
the Chief Minister should seek the restoration of Sabah’s rights to impose oil
royalties which are provided under the State List of the Federal Constitution
and Section 24 of the Land Ordinance, Sabah Cap. 68.
How
Much Potential Oil Royalties Did Sabah Lose?
Thirdly, as explained, the
current 5% oil revenue receivable by the State is cash payment under Section 4
of the Petroleum Development Act and nothing to do with royalties.
In a video recording done in
1975, Tengku Razaleigh Hamzah, who was then Minister of Finance and President
of Petronas explained that royalties entitlements of the states was 12% for up
to 3 miles from the shoreline, and with the federal government getting 10% for
up to 10 miles and 8% to the federal government for up to the international
boundary.
Assuming that this was
implemented, Sabah would have gotten or received a total of at least 17% in oil
revenue with 12% in royalties and 5% cash payment.
It is STAR’s view that Sabah
should receive at least 30% in royalties because Sabah’s boundary is the same
as the international boundary as Sabah gained independence on 31 August 1963
thereby establishing its international boundary as a nation. This means Malaysia’s international boundary
coincide with Sabab’s international boundary.
STAR’s
Views
As part of STAR Sabah’s
causes and aspirations for Sabah, STAR is seeking an increase of the oil
revenue to 50% nett revenue excluding royalties which are payable even if the
ownership is transferred to Petronas. It
is set out in STAR’s Petroleum Masterplan which is comprehensive and covers a
wide range of policies for Sabah’s oil and gas beneficial to Sabah and
Sabahans.
It is also STAR’s view that
Sabah’s or Sarawak’s oil rights CANNOT be transferred as it belongs to the
States but can only be leased or assigned for a specific period.
An increase from 5% to 50%
will bring in an additional amount of at least about RM7.0 billion a year for
Sabah. It will definitely help Sabahans
and alleviate if not eliminate poverty totally in Sabah.
The additional RM7.0 billion
will be proof that the federal and state governments are sincere in resolving
the oil issue and talk of asking for a review is not just mere election gimmick
to hoodwink the voters in Sabah in the coming general elections.
Sabah BN should touch their
heart and impose their political will and secure a new oil deal for the future and
benefit of Sabahans and not pay mere lip service and play the issue up as an
election gimmick . And if the federal
government and Petronas does not agree to a new deal for Sabah and Sarawak, the
Sabah and Sarawak should stand united and change the federal government for the
sake of Sabahans and Sarawakians alike. (STAR Media)
No comments:
Post a Comment