Daily Express
Established since 1963
Chance for Labuan to earn billion$ via new role

Published on: Thursday, December 05, 2013

Labuan: The island stands to earn several million in US currency daily or more than US1 billion yearly if a China investor's plan to build an oil storage, refinery and gas facilities materialises.

Under the plan, Kuraman island, instead of Pulau Daat, would be an oil and gas complex for resources imported from elsewhere, as suggested by Federal Territories Minister Tengku Adnan Mansor.

"Based on international convention, operators will have to pay US3.50 per barrel on any oil or gas passing through Labuan (Malaysia).

With this, Labuan will receive several million in US dollars per day or more than US$1 billion per year," said former Chief Minister Tan Sri Harris Salleh.

Seeing a bright future for the oil and gas industry, here, Harris said Labuan was the best for downstream operations as it is strategically placed with the demand for services increasing. He said many of the supporting companies had braced themselves for more activities from the inevitable development of Spratlys oil operations.

The Spratlys was reported to have 150 billion of oil and 500 million trillion cubic feet of gas. He said these resources were more than the present deposits in the Middle East. Spratlys is merely 200km from Labuan and since the island had a deep natural harbour and free port, it would also be the natural choice for workers to take up residence on the island.

Harris said having being responsible for the handing of Labuan to the Federal Government for administration in 1984, "though Labuan's future looked brighter every day," he wanted to see " an even greater push."

He said though the Federal Government was to make Labuan the free port and only Offshore Financial Centre in Malaysia, the political will was not matched by administrative will. He blamed this on slackness of several Federal-appointed "Managers" who saw it fit to allow financiers to operate from Kuala Lumpur. This policy remains till today.

"Thus the numerous large buildings built to service the Financial Centre activities either remain idle or are used by government department (an apparent reference to the Financial Park complex)."

He said the proposed developments would also trigger a boom in Labuan's tourism and was glad there were now the the right people in Prime Minister Datuk Seri Najib, MP Rozman Ali and Tengku Adnan to ensure it becomes a little Singapore or Hong Kong in terms of prosperity.