Rahman Yakub silent on why Terengganu gets oil royalty

(The Malaysian Insider) KUCHING, March 11 — Despite arguing that Kelantan was not entitled to oil royalty claims, Tun Abdul Rahman Yakub, the Sarawak Chief Minister when the Petroleum Development Act (PDA) came into force in 1974, was unable to say yesterday why neighbouring Terengganu was receiving from the federal government oil royalty payments.

He had said yesterday that the legal position governing the oil royalty claims of Sabah and Sarawak was different from that of the states in peninsular Malaysia.

He differentiated Sarawak’s position from that of Kelantan — which is now planning to sue the federal government for oil royalty — by arguing that the east Malaysian state could rely on a colonial-era declaration that its territorial waters extended beyond the three nautical mile limit.

But he was silent when asked by The Malaysian Insider about why the federal government had been paying Terengganu oil royalties while refusing to do so for Kelantan.

Petronas had been paying Terengganu the 5 per cent oil royalty since offshore production began in 1978 but stopped after PAS captured the state in the 1999 general elections.

It promised to resume twice-yearly direct payments from March 2009 after the earlier payments were converted to compassionate payments disbursed by federal agencies.

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