Sabah gets more than just oil royalty – council

KOTA KINABALU: There is more to the oil and gas industry in Malaysia than just the royalty, Sabah Oil and Gas Services Council vice chairman Datuk Albert Boyou said.

Albert said though a review of the royalty would do no harm, the government had done much to ensure people in the four oil and gas producing states were actively involved in the sector.

In Sabah, Chief Minister Tan Sri Musa Aman was instrumental in pushing for greater participation in the oil and gas sector through Petronas as well as provide opportunities for more people in the state.

“Previously, this was hardly the case and opportunities in the sector were hard to come by,” he said, adding this was evident with the development of the many major projects that came since Musa took office in 2003.

In Sabah, key developments in place include Sabah Oil and Gas Industrial Park (SOGIP) which has attracted RM11 billion in investments, Sabah Oil and Gas Terminal (SOGT) in Kimanis as well as the 500km Sabah, Sarawak Gas Pipeline (SSGP) that links Bintulu, Sarawak.

Sabah is also working on getting a 10 percent stake at the Liquefied Natural Gas Sdn Bhd 9 in Bintulu under Petronas.

Albert said this in response to a proposal by Pakatan Harapan in its Alternative 2018 Budget to increase the royalty to 20 percent for four oil and gas producing states, Sabah, Sarawak, Terengganu and Kelantan.

Musa has taken a strong stand on the importance of getting more locals involved, from getting a board member appointed in Petronas and securing major developments in the state, he pointed out.

Industrial Development Minister Datuk Seri Raymond Tan Shu Kiah was also put in charge by Musa to look specifically into ways and means the oil and gas sector could be further developed in the state.

“All these are major developments which will provide jobs and boost national revenue that could spur greater economic activities for the people instead of just limiting the states to the royalties,” he stressed.

Major oil and gas industry players have invested in Sabah, he said.

“The number of local companies playing a role, have jumped in numbers, servicing and undertaking projects distributed by the national oil and gas company Petronas or that of other multinational companies with interest in the industry Sabah,” he said.

The SOGT has a capacity of handling 260,000 barrels of oil and 1,250 million standard cubic feet of natural gas per day. All these are supplied from the Kinabalu NonAssociated Gas field southwest of the state via a 120km underwater pipeline.

There is also the Sabah Ammonia and Urea Complex (SAMUR), the third fertiliser plant operated by Petronas in the country, with a capacity of producing 2,100 tonnes of fertiliser per day, or up to 1.2 million tonnes, annually.

Sabah is also now prospecting in the industry through Sabah International Petroleum Sdn Bhd, an investment arm under Sabah Development Bank.