KUALA LUMPUR, May 14 — Petroliam Nasional Bhd (Petronas) said today it has no power to increase oil royalties for Sarawak after the state’s legislative assembly passed a resolution last week to demand an increase from 5 per cent to 20 per cent.
The state oil and gas giant said it will continue to abide by the Petroleum Development Act 1974 (PDA) and the decision on royalties will be up to the federal government.
“If there’s any readjustment, it’s up to the Federal Government,” Petronas CEO Tan Sri Shamsul Azhar Abas told reporters.
He said the Sarawak resolution also included requests for more development grants from Putrajaya aside from the royalties.
“Development budget does not necessarily have to come from royalty,” he added.
The resolution for the increase, proposed by a Barisan Nasional lawmaker, was passed in the Sarawak legislative assembly on May 6.
Following Sarawak’s move, Kelantan had also asked other oil-producing states — Terengganu and Sabah — to follow suit.
Kelantan and Petronas have been battling the oil royalty issue in court since 2010, which has yet to be resolved.
Lawyers for the oil giant have argued that Kelantan’s claim has no merit.
In the run up to the 13th general elections, opposition pact Pakatan Rakyat had dangled the promise of increasing the oil royalty, especially to Kelantan, as part of its manifesto.
