Body to discuss oil royalty
(Borneo Post) – The Sabah state government will form a body to discuss and refine the 20 percent oil royalty issue.
Chief Minister Datuk Seri Panglima Mohd Shafie Apdal said the body will refine the terms with the Federal Government, especially with Prime Minister Tun Dr Mahathir Mohamad.
“Sabah is aware and know what is contained in the manifesto of Pakatan Harapan is oil royalty, however it is interpreted quite differently from what Sabah knows and it will be discussed in depth.
“The way we approach is to sit at the table, how to refine so that the execution can be accomplished,” he said yesterday after officiating the Malaysia Education Service Retired Teachers Association (PPPPPM) Sabah branch’s 13th annual general meeting at a hotel here.
He said what matters to Sabah is financial assistance through dividend yields where the royalties are oil obtained from states that become oil producers in Malaysia.
“We will make sure that one body refines it and we are convinced that this matter should be addressed to the authorities concerned,” he said.
Shafie added it is not just talk, the state government will make sure it becomes a reality.
“Previously, we did talk about it, not just our support for what is contained in the manifesto.
The question is in terms of implementation, whether 20 per cent based on royalty or profit based. But it has been announced based on profit, so we ask that it be based on the existing royalty approach because the five percent is based on royal dividends. So if these additions are based on others, then we need to communicate our views with government to government,” he said.
Shafie added the state government knows that there is indeed a law in the agreement where the powers at the level of the two states, especially Sabah and Sarawak, where productions are under the jurisdiction of Sabah and Sarawak and are enshrined in the existing constitution.
He said from the point of agreement between Petronas and the state government in the 70s, the Petroleum Development Act was created as an approach that allowed Petronas to explore. But the agreement was between Petronas and the state government. What is contained in the Constitution is another.
Meaning, under the law, the agreement cannot repeal what constitutes in the constitution. So it is not possible to abolish any act in the constitution unless Sabah abolish it in the State Legislative Assembly.
“But we did not make such an approach, so we have already received five percent before, so we ask that 5 + 15 percent need to be defined,” he said.
Recently Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said the federal government could not expedite the granting of 20 per cent oil royalty to petroleum producing states because it was stipulated under the Petroleum Development Act 1974 that the royalty was based on gross profit and not net profit.
