Courts should not be the only option for Sarawak’s oil royalty fight, group says

SPG said the inequitable of wealth and the continuing poor management of Sarawak’s oil and gas resources is manifested in the current disagreement between the state and federal government and Petronas. — Reuters pic
SPG said the inequitable of wealth and the continuing poor management of Sarawak’s oil and gas resources is manifested in the current disagreement between the state and federal government and Petronas. — Reuters pic

KUCHING, Dec 26 ― Think tank Suarah Petroleum Group (SPG) today said going to court should not be the only option left to the state government in its pursuit to take back the oil and gas resources found in the state’s territorial waters.

It said the state government should also relentlessly pursue all options, including legal and political, until resolution to Sarawak’s full satisfaction.

SPG said the inequitable of wealth and the continuing poor management of Sarawak’s oil and gas resources is manifested in the current disagreement between the state and federal government and Petronas.

“To say or imply in any way that Sarawak’s demands are driven by short- term objectives or simply wanting larger royalty now is an oversimplification and misinformation that certain parties have put forward to mask the genuine and legitimate concerns of Sarawak that underpin state government’s position,” SPG said in a statement.

It noted that the federal government, although it does not own any oil or gas, also gets 5 per cent oil royalty, like the oil producing states.

“At the same time, the federal government also collects petroleum income tax from both Petronas and other production sharing contracts (PSC) companies as well as dividends from Petronas’s profits.

“It is a known estimate among oil and gas players that the federal government reaps approximately 92 per cent of the revenues collected from oil and gas in Malaysia,” SPG said.

SPG claimed that Petronas chief executive officer Tan Sri Wan Dzulkiflee Wan Ariffin’s recent media interviews have put forth rather misleading information.

It said one of which was that Petronas only makes a profit margin of 3.7 per cent from its local oil production, which would appear to be with regard to deep water operations, that at the moment only constitute a small part of Petronas’s local operations, while most are still in shallower waters.

“The real reason is that the federal government does not want to reduce its 92 per cent stake from petroleum revenues,” SPG said.

“As a result of the long years of abuse by the federal government, Petronas is now unable to meet the legitimate demands of the petroleum-owning and producing states like Sarawak.

“This is a legitimate and pressing concern for us, even as the federal government is asking us to ‘buy-back’ what we have vested in good faith over the years yet receiving a pittance and sacrificing our own socio-economic development, which continues to lag behind,” SPG said.

SPG said it believes that it is only proper for the Sarawak government for the return of petroleum resources and assets to Sarawak.

“We strongly believe that Sarawakians can certainly do better at managing Sarawak’s own petroleum resources than Petronas,” it added.

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