Published on: Sunday, February 07, 2010 |
Kuala Lumpur: Former Petronas Chairman Tengku Razaleigh Hamzah maintained that national oil corporation Petroliam Nasional Bhd (Petronas) must pay oil royalties directly to state governments.
The Gua Musang member of parliament said the company should honour the agreement which was signed with all state governments under the Petroleum Development Act 1974.
The agreement states that state governments vested off all their rights to their petroleum resources but in return, Petronas has to pay the respective states five per cent royalty in cash from oil found on or offshore of the state.
"The act clearly states that payments must be paid to the state governments and not to any other parties," Tengku Razaleigh told a press conference at his residence yesterday.
On Jan 23, Deputy Finance Minister Datuk Dr Awang Adek Hussin said the ministry was holding talks with Petronas to speed up the payment of wang ehsan by the end of next month to Kelantan and that payment would be made via Kelantan Federal Development Department (JPPK) as the Federal Government was not confident that the state government would be transparent in the way the money was spent.
Tengku Razaleigh was appointed by former prime minister Tun Abdul Razak to head Petronas in 1974.
He was also responsible for drafting the act and agreement.
He said he was "sad" and "ashamed" that wang ehsan was offered to the Terengganu and Kelantan state governments instead of cash payments or royalties.
"I hope payments in the form of wang ehsan are stopped.
"Petronas has made a serious mistake when paying wang ehsan on compassionate grounds.
"There is no provision in the act or agreement regarding payments on compassionate grounds," he said.
The former Finance Minister also said he was raising this issue of petroleum royalty as he wanted the government to "do the right thing".
He expressed hope that incoming Petronas chief executive officer Datuk Shamsul Azhar Abbas would conduct his duties according to the agreement.
Asked whether Petronas was caught in this issue due to politics, Tengku Razaleigh said: "In my opinion, I don't think Petronas should follow the directions of politicians.
"They must act in accordance with the law.
"Even if they find the direction is ill advised, then they should advise the politicians accordingly so that they will not be forced to do things which are contrary to the provisions of the law and agreement."
Meanwhile, Tengku Razaleigh dispelled rumours he is defecting to Parti Keadilan Rakyat, following calls from Umno MPs that he quit his post due to his statements on the petroleum royalty.
"Why must I cross over? I am very comfortable where I am.
"In fact, I worry that if I step down, Umno may not win the seat.
"I don't want Umno to lose this seat. As it is, Umno does not have enough seats in Parliament," he said.
