20% oil royalty: Shafie to talk directly to Mahathir

Shafie (5th from right) and Azmin (4th from right) pose for a group photo after the meeting at Seri Gaya, Kota Kinabalu.

KOTA KINABALU: Chief Minister Shafie Apdal will talk directly to Prime Minister Dr Mahathir Mohamad to inform the federal government of Sabah’s stand on the oil royalty distribution.

Speaking to reporters after a meeting with Economic Affairs Minister Azmin Ali today, Shafie said the oil royalty issue was briefly discussed during the hour-long gathering.

“We talked about that a bit because Azmin had already spoken on the issue in Parliament. I made it clear to him about our hopes on the matter,” he said.

Azmin had said the 20% oil royalty, as promised by Pakatan Harapan in its manifesto, will be fulfilled but the calculation will be based on Petronas’ net profits.

Under the Petroleum Agreement 1976, Sabah and Sarawak are given 5% cash payment each, based on the value of gross production from each state. The federal government will also collect 5% of the total value of gross production.

Shafie has said the 20% oil royalty stated in the Pakatan Harapan manifesto should be taken as an increase on the present 5% value of gross production in the state.

This would make Sabah and Sarawak receive three times more than the total cash payment.

Concerns have been raised that calculation based on net profit would be far less than what Sabahans have expected all this while.

Shafie insisted it was not the end of the road for Sabah yet as both governments will look into the matter and find ways to ensure the promise of 20% oil royalty can be implemented.

He said there were a few things that needed to be deliberated upon but refused to divulge further details.

“I will discuss these matters with Mahathir soon. If not tomorrow, there will be other times to do so,” he said.

Mahathir is scheduled to attend the national-level Malaysia Day celebration at Padang Merdeka here tomorrow.

Meanwhile, Shafie said he had conveyed to Azmin the need to give Sabah greater power in implementing projects in Sabah.

He said Parti Warisan Sabah is looking for more power devolution, and that funds from the federal government should be given directly to the state to avoid overlapping of functions and projects.

“There are areas in Sabah where people are still drinking water from wells. We want the funds to be used properly. Sometimes, there are overlapping projects and this problem must be addressed.

“The state government is ready to cooperate fully with the federal government to ensure development projects can be carried out smoothly.

“Besides, our target groups are the same. Whether the project is implemented by the state or the federal government, the intention is to help the people,” he said.

He said the state government was in a better position to monitor projects in Sabah.