No ‘royalty’ term included in 1975 Petronas agreement, says Kelantan Pakatan chairman

A car passes by a Petronas petrol station in Kuala Lumpur July 31, 2019. — Reuters pic
A car passes by a Petronas petrol station in Kuala Lumpur July 31, 2019. — Reuters pic

PASIR PUTEH, Oct 17 — There is no term called ‘royalty’ included in the agreement between Petroliam Nasional Berhad (Petronas) and the Kelantan government, says Kelantan Pakatan Harapan (PH) chairman Senator Datuk Husam Musa.

Husam, who is also a former state government executive councillor, said there was only the term cash payment and that the money is deposited directly to the state government’s account.

“The agreement between Petronas and the state government in 1975 was only referred to as cash payments (not royalties). The term is not a problem, as long as the money goes to the state government’s coffers,” he told reporters after opening the Kelantan State Padi Wangi Cooperative meeting at the Kemubu Agricultural Development Authority (KADA) office in Selising, here, today.

He said the previous federal government under Barisan Nasional (BN) credited the money into the accounts of the Kelantan Federal Development Department (JPP) and the Kelantan Islamic Religious and Malay Customs Council (Maik).

“Only after PH took over (the Federal government administration) (Prime Minister) Tun Dr Mahathir (Mohamad) had made the policy (regarding petroleum and gas royalty payments to the producing states) and the policy had been discussed in the PH Presidential Council.

“The PH Council agreed that cash payments should be made to the state governments involved, and when the policy was implemented, payments were made, quietly,” he said.

Husam said although Kelantan was said to possess four oil wells, three of them were located in disputed areas, which resulted in lower yields for the state.

“More importantly, the people of Kelantan need to know the state government’s plans for the RM28 million (received). The state government should present it to the people as to how much of it will be allocated for education, welfare, orphans, farmers and youths,” he said.

On Monday, Finance Minister Lim Guan Eng was reported as saying that oil royalty payments had been made to Kelantan last month, upon the directive of the prime minister.

However, Kelantan Mentri Besar Datuk Ahmad Yakob on Tuesday reportedly said that Kelantan had only received ‘Wang Ehsan’ from the federal government (compassionate payment) on September 17, and not royalty payments. — Bernama

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