S’wak hasn't dropped demand for oil royalty hike
Published on: Friday, November 01, 2019
KUCHING: The Sarawak Government has not dropped the demand for Petronas royalty hike.
Office of the Chief Minister, in a statement Thursday, said the current negotiation with the Federal Government is based on the demand.
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“Reference is made to an article published today on the Star online news portal and various other portals suggesting that Sarawak is dropping 20 per cent oil royalty demand from the Federal Government.
“This article is misleading and vexatious in intent,” said the statement.
Local news portal on Thursday reported that a key negotiator said Sarawak would drop the demand for quadrupling royalties paid by energy giant Petronas but is pushing for production-sharing and other agreements.
J.C. Fong, legal adviser to the Sarawak Government, was reported saying that the State accounted for two-thirds of Malaysia’s total gas production and almost a third of the oil produced, and therefore deserves a bigger share of the Petronas pie.
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“They now say they can’t afford it, it will bankrupt Petronas and all that, so of course we have to find the alternative solutions for them to get out of this failure to fulfil the electoral promise,” said Fong, a former Attorney-General for Sarawak.
“The alternative is a commercial solution. That does not hurt them too much in terms of their cash flow, but allows us to have a fairer share of the revenue and more participation and so on and so forth.”
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Fong also said negotiations on the issue had been going on for more than a year and a settlement could include production-sharing and better availability of oil and gas for industry in Sarawak.
Prime Minister Tun Dr Mahathir Mohamed had said at an event in New York last month that his government was trying to work out how to give Sarawak and Sabah “more money without undermining Petronas’ own strength”.
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