Malaysia: tussle for nation's oil revenue heats up.
Petronas founder heads royalty probe
The founding chairman of Petronas, Razaleigh Hamzah has agreed to head a Parliamentary Caucus mooted by Malaysian opposition coalition Pakatan Rakyat (PR) to redistribute oil royalties from the federal government to the state authorities.
PR leader Anwar Ibrahim said Razaleigh had accepted the invitation in the Parliament this morning.
The Caucus aims to draft amendments to the Petroleum Development Act to ensure that oil-producing states — including opposition-controlled Kelantan — receive royalties in line with the philosophy that constituted the Act in 1974, the Malaysian Insider reported.
Anwar said the draft bill will be discussed during PR convention next month.
“The draft bill will explain the status and state powers on the distribution of oil royalties to the oil-producing states.
“We will table the bill during this parliament sitting,” Anwar was cited by the Star newspaper as saying after chairing a Pakatan Rakyat meeting on the matter at Parliament House yesterday.
Anwar said ambiguity existed in the original Petroleum Development Act 1974, that didn’t specify the issue of territorial rights of oil-producing states, especially on the limits of the state’s rights to offshore oil production.
“We want to make the law explicit so that it doesn’t run against the interests of the state,” he added.
The Star newspaper said Anwar plans to write to Minister in the Prime Minister’s Department to invite Barisan Nasional’s Members of the Parliament into the caucus.
Razaleigh’s involvement in the Opposition campaign to regain oil royalty for Kelantan formally started last Wednesday when he said that the state had the right to receive profit from its oil, the Malaysian Insider reported.
The Kelantan prince and former finance minister was one of the lawmakers involved in the drafting of the Act and the opposition have argued that the law was drafted to ensure that oil-producing states receive 5% royalty.
He said that it was Kelantan’s “constitutional right” to receive them.
Malaysia’s Prime Minister Datuk Seri Najib Razak had said that Kelantan is not entitled to it as oil is extracted beyond the state waters or beyond three nautical miles from the shore.
This argument was again used as the government’s defence in not giving Kelantan royalty by the Nazri when pressed by the Opposition in Parliament last week.
Kelantan, which is under PAS control, will instead receive “goodwill payment” for their oil said Prime Minister Datuk Seri Najib Razak.
The announcement sparked an uproar among PR lawmakers, particularly those from PAS, who have been fighting to get oil royalty since 2001. The campaign was led by Kelantan state exco Datuk Husam Musa.