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Oil royalty is ‘our right’, Masing

 | August 23, 2013

Has Senior Sarawak Minister James Masing 'misread' the law and agreement between the state and Petronas on oil royalty?

KUCHING: Former Sarawak deputy chief minister Daniel Tajem has rapped state Land Development Minister James Masing for suggesting that the state government should not ask for oil royalty because “it’s a lazy man’s way of doing business”.

“Oil royalty is a matter of right. You don’t ask for it because it must be paid to the state in order to extract oil from the state,” said Tajem.

Tajem, who is a prominent lawyer here, said that Masing was obviously ‘misreading’ the law and the agreement between the state and national oil company, Petronas.

He chided Masing for simply opening his mouth without realising the implications of his suggestion not only to the people of Sarawak but to the state as well.

“You don’t say that royalty is a lazy man’s way of doing business. It is our right for extracting oil from our state, and if you ask for participation then that should be in addition,” he said referring to Masing’s statement at the second Sarawak Oil and Gas Expo and Palmex Sarawak 2013 in Miri recently.

Masing, a senior minister, reportedly said that Sarawak wanted to participate in onshore oil and gas production sharing contracts to create greater income and job opportunities for its skilled workers rather than receiving passive oil royalty.

“I don’t think we should ask for royalty – to me it is a lazy man’s way out, but we must work on production sharing for oil discoveries onshore.

“With participation in production sharing contracts with Petronas in the picture, this should be the way forward for onshore oil discovery within our territory,” Masing had said.

Reacting to his statement; Tajem asked: “But the question is who should participate in such contracts if not those who are already in the business?

“Such participation will be subject to ‘profits and losses’ while our royalty which is currently 5% is a fixed percentage based on productions.”

New onshore fields

Tajem believed that individual participation would deprive the people and the state of any profits as such profits would go to private individuals and companies.

“These people have connections with the powers-that-be, and they are the ones who will benefit,” Tajem stressed.

Oil royalty is one of the major issues raised by Pakatan Rakyat in Sarawak during the 13th general election.

Pakatan had campaigned that it would increase oil royalty from the present 5% to 20% if they formed the federal government.

Masing’s call for participation in the oil and gas industry is believed to have stemmed from the discovery of new oil and gas in onshore Sarawak namely the Miri, Asam Paya and Adong Kecil west fields.

The Adong Kecil oil field is about 20km northeast of Miri city. Currently Miri produces up to 440 barrels of oil and more than 11 million cubic feet of gas per day.

In 2011 Petronas paid the federal government and oil-producing states some RM65.7 billion.


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