PETALING JAYA: The federal government has been urged to deliver on an election campaign promise of granting a 20% oil royalty to Sabah and Sarawak, even as the national petroleum company, Petronas, insists that it has legal rights to oil and gas resources in the whole country.
Johan Ariffin, a former deputy director of Sabah Foundation, said the issue of the ownership would take time to resolve.
However, the Pakatan Harapan campaign promise of 20% oil royalty could be carried out “without much difficulty and should be done first” before the dispute over ownership was resolved, he said.
Johan, who is also a member of the Group of 25 Eminent Malays (G25), said Petronas could be instructed by the federal government to increase the current 5% royalty to 20%.
Petronas and the Sarawak state government are at loggerheads over ownership of oil and gas resources. Petronas stands by its rights under federal law while the Sarawak government has passed a new state law regulating exploitation of oil and gas.
Johan said: “Where unfair laws are concerned, we can always go back to Parliament to right the wrongs. But the 20% oil royalty must be fulfilled. That’s a straightforward issue.”
Ownerhip of resources was part of the Malaysia Agreement 1963, “something that needs to be honoured, regardless of who is the government of the day”, he said.
Johan contended that issues related to oil and gas resources went beyond the Petroleum Development Act, which grants rights to Petronas. If such issues were not resolved, they could fester and this would be unhealthy for federal-state relations.
Pakatan Harapan elected representatives from Sabah and Sarawak were also urged to pursue the 20% royalty issue.
Sarawak For Sarawakians (S4S) spokesman Peter John Jaban said: “This is why people voted for PH. In Sarawak, oil royalty is perhaps the single biggest concern of the people.”
He urged the federal government to make an announcement on oil royalty within four months.
Petronas has maintained that it has exclusive ownership of the petroleum resources in Malaysia. The Sarawak state government has announced it intends to exercise its power to regulate oil and gas activities in the state.