Dr Sim asking 100 pct oil and gas royalty insane — Chong

KUCHING: It’s either he is totally ignorant or he is trying to fool the people with the kind of argument when he said Sarawak Barisan Nasional (BN) wants 100 per cent oil and gas royalty from the federal government.

This is what Democratic Action Party (DAP) Stampin candidate Chong Chieng Jen described his opponent Datuk Dr Sim Kui Hian.

Chong alleged that Dr Sim has said in a local Chinese daily that the state Pakatan Harapan’s request of 20 per cent oil royalty from the federal government if the opposition captured Putrajaya was too little compared with state BN’s quest of getting 100 per cent.

He said Dr Sim’s statement was just another ‘hot air’.

“It is a fact that in 2014, the State Legislative Assembly (DUN) under the leadership the late Pehin Sri Adenan Satem had passed a resolution, unanimously asking for 20 per cent royalty.

“Four years have passed, and the federal government still refused to grant that 20 per cent. Now, Dr Sim is talking about 100 per cent.

“If you can’t even deliver what was unanimously resolved in the DUN, what is there to talk about of you wanting 100 per cent,” he told a press conference at DAP headquarters here yesterday.

Chong pointed out that it is impossible to get 100 per cent royalty from oil and gas in Malaysia.

Royalty is compensation in lieu of rights. What is happening now is that the state government has sold its right by virtue of Petroleum Development Act - selling their rights to the federal government, to Petronas.

The compensation for selling the rights is five per cent royalty. That five per cent is based on the gross price.

“Looking at the oil industry in Malaysia at the moment, 60 per cent goes to the contractors who explore and extract oil, such as Shell and others.

“Five per cent goes to the state government and five per cent to the federal government while 2025 percent goes to Petronas as cost of operation – research and development (R&D), and future investment.

“The other remaining percentage is the profit. The federal government gets a few percent from the profits of Petronas. They also get a few percent from the contractors, which they called the Petroleum Tax.

“So adding up, the federal government is getting 10-15 per cent,” he said.

Chong said the state PH was suggesting a 20 per cent oil and gas royalty because that is the maximum the state can get from the extraction of crude oil and gas from Sarawak.