Sabah wants a stake – CM
KOTA KINABALU: Sabah does not want a 20 per cent oil royalty payment based on nett profits and will pursue for a stake in every state-level Petronas operation, said Chief Minister Datuk Seri Mohd Shafie Apdal.
“This matter is very serious to us and because we do not want to see that it will only be based on 20% nett (profit). If it is only based on 20% nett, there will be problems when there is no profit. So there is no revenue at Sabah state level. We are aware and know that,” he said when replying to Tambunan assemblyman Datuk Dr Jeffrey Kitingan at the State Assembly sitting yesterday.
“Therefore, I will also emphasize the need for every existing Petronas activity that operates at the Sabah state level, Sabah interest must be impelled. We need to have a stake, not only they (Petronas) create business activities at the exploration and downstream levels, Petronas is doing it but without the involvement of Sabah. There must be involvement of Sabah and we must have stake,” he said.
“We have vehicles. We have some companies that we have prepared, only restructuring is necessary because all the companies created have suffered losses. We inject RM500 million, the money is gone but the business is not there so this should be looked at by the (new) state government.
“Before we succeed this agenda, we must have the vehicle that is very clear. Sabahan has been there in the petroleum business but the state vehicle must also be involved.
“In this effort, in the downstream activity, I do not want that there will be a monopoly at Petronas level when there is a downstream activity at the Sabah state level because we realize that if we have a stake in Petronas’ activity, if the profit royalty goes down, we have income in our engagement with them. Then it will be guaranteed, if our activities in this downstream can be realized,” he explained.
During the question and answer session, the Chief Minister said Sabah will stick to its 20 per cent royalty demand rate but will consider the acquirement of the federal government’s Petroleum Development Act (PDA) 1974 five percent cash payment whilst the latter sorts out the payment formula for all Malaysian oil producing states.
Shafie expressed confidence that the federal government can sort out the 20% payment but said Karanaan assemblyman Datuk Seri Panglima Masidi Manjun’s suggestion would be taken into consideration.
“It is a good idea; we say if we do not get the 20%, ahead of it five percent. Why not? That is what we are saying when we discussed it with the authorities at the federal level. They have stated that (if) they lose in venture, they will go bust if they give 20%. No,” shared Shafie, who is also state Finance Minister.
“Since we have established Petronas and the PDA in the early 1970s, we know the capital injection is huge but in the period of those years since 1970s, it can’t be that there has been no return. I know, I used to be in the (federal) cabinet. When comes the general election, BN will get the dividend of how many millions, how many billions. I know. It can’t be that if they give us 20%, Petronas will shut down. It can’t.
“Maybe 20%, in the magnitude of our counting, we will acquire RM5 billion, RM6 billion. If it can be done but I am confident (it can). I thank Karanaan for giving his opinion to us and I will take it into account whether the matter can be realized,” he said.
Masidi had urged the state government, as an early step, to ask for a federal government commitment to give a bigger allocation of this oil revenue by asking the federal government to surrender its five percent to the state government.
“In other words, instead of the state getting five percent, make it 10% gross because the federal government can afford to surrender their five percent to the state government because they have acquired other remuneration in terms of dividend,” justified Masidi.
“Perhaps as an early step, while it (federal) thinks about what is the best formula, why not ask the federal government to surrender its five percent to the state government,” he suggested.
He further explained, as the sole owner of Petronas, the federal government is profiting from the dividend profit, and taxes from the profit.
Earlier on, when responding to Tamparuli assemblyman Datuk Jahid Jahim’s question, Shafie said the state government in line with the Inter-Governmental Committee, Malaysia Agreement 1963 and Federal Constitution have presented several claims to regain Sabah’s rights.
This involved the Federal Constitution Subject 1 (2) before the 1976 amendment which stated that Federation must be recognized in Malay and English as Malaysia which consists of three entities namely the Malayan states, Johor, Kedah, Kelantan, Melaka, Negeri Sembilan, Pahang, Penang, Perak, Perlis, Selangor and Terengganu, the Borneon states, Sabah and Sarawak; and Singapore. Other matters include the review and increase of Sabah Petroleum cash payment and Borneonisation that calls for 90% of federal department heads to be Sabahans.