‘Sabah must get more from new oil finds’

Queville To

With the new oil and gas finds in Sabah, it is imperative that the deal with Petronas is revisited, says Jeffrey Kitingan.

KOTA KINABALU: Jeffrey Kitingan today claimed that state Barisan Nasional leaders stopped making a fuss about the meagre oil royalties from Petronas once their ‘associates’ had been awarded lucrative contracts by the national oil company.

Disclosing this, Borneo Heritage Foundation (BHF) leader Jeffrey said: “Sabah BN leaders should also stop paying lip service and for once seriously consider the interests of the state and the plight of the poor citizens.

“The time is up for these leaders and for patriotic leaders to rise and demand for the rights of Sabah and its people to be the paramount criteria, especially for the sake of the future generations of Sabahans.”

Stressing his views in a statement issued today, Jeffrey said the Umno-led BN state government and its leaders needed to re-examine and re-think their strategies on the oil and gas resources located in Sabah and its territorial waters, especially in view of new oil finds in the state.

“With the loss of ‘Blocks L and M’ to Brunei without so much of a whimper from the Sabah state government and its Barisan Nasional leaders, the state government should not lose this new opportunity to re-negotiate on the Petroleum Development Act 1974 and on a more equitable and fairer revenue sharing formula,” the former PKR vice-president said.

He lamented that the current 5% oil royalties directly contributed to Sabah becoming the poorest state in Malaysia. Sabah was once second richest state after Selangor (then including Kuala Lumpur) in 1970.

He added that the disclosure by Chief Minister Musa Aman in the 2011 state budget in November 2010 that Sabah was projected to receive RM721.7 million as oil royalties for 2011 paled in comparison to the RM13.7 billion that will be received by Petronas.

(The projected figures are however expected to be much higher given the current global crude oil prices)
According to Jeffrey, the RM721.7 million was ‘small change’ for a total oil revenue of RM14.42 billion for Petronas from Sabah.

Lucrative Petronas contracts

Chief Minister Musa in January 2011 also disclosed that Sabah now produced 26.9% of Malaysia’s daily crude oil production.

“Together with the liquefied natural gas (LNG) in current production, including the wells off the island of Labuan and the existing LNG fields that are to be tapped and then piped to Bintulu via the new Kimanis-Bintulu Pipeline, the new gas find of 550 billion standard cu.ft. with an estimated daily production rate of 21 million standard cu.ft. as well as rumours of new oil-fields off Sandakan and Kudat and the much touted “find of the century” somewhere off the coasts of Sabah, oil and gas is here to stay and could play a very crucial and integral part of Sabah’s economy and future,” Jeffrey noted.

He also expressed regret over the imminent siphoning of Sabah gas all the way to Bintulu, Sarawak via the Kimanis-Bintulu pipeline.

He contended that the cost of the new production facility and the gas pipeline could have been spent on a new facility in Sabah to process Sabah’s LNG rather than being sent 533 km overland to Bintulu.

“With the (gas) pipeline, Sabah has lost all the spin-offs that could be generated if the production facility was housed in Kimanis, Sabah,” he lamented.

Jeffrey claimed that information from reliable sources close to Petronas revealed that Petronas was building another four platforms off Kimanis with a budget of RM8 billion.

He thus reiterated that together with the new gas finds, there was no excuse for Sabah not to develop its own oil and gas industry locally.

Sabah contractors sidelined

He also claimed to have met international oil and gas corporations who were prepared to invest in Sabah if Sabah developed its oil and gas industry.

He added that BHF was prepared to spearhead the development of the oil and gas industry in Sabah, if the state government was unable to do it.

“In fact, BHF has received calls from various sources to urge the state government to step down for failing to look after the interests of Sabah vis-a-vis the oil and gas resources in Sabah and failing even to safeguard the interests of Sabah contractors in the construction of the Sabah Oil and Gas Terminal (SOGT) in Kimanis,” he claimed.

He further lamented that while Petronas had previously indicated that the total expenditure in Petronas projects in Sabah was expected to be in the region of RM36 billion, Sabah contractors were yet to enjoy jobs.

“So far less than 5% of Sabah contractors have only been awarded contracts and to top it all, the SOGT contract is being awarded to a Sarawak company.

“If the state government is to continue with its lackadaisical approach, Sabah’s economy and its people will remain the poorest in Malaysia,” he warned.

Jeffrey thus contended that there is no point in the state government claiming to be in the coalition with the federal government and having good relationship with the federal government when it cannot even secure a better and fairer revenue sharing with Petronas and looking after Sabah’s interest.

He further said that Sabah should be getting 50% oil royalties and at least a 12.5% stake in Petronas as a contributing stakeholder in the wealth of the Petronas Group.

Being oil producing state, Sarawak, Terengganu and Kelantan should also similarly be given  a 12.5% stake each in Petronas, with the balance 50% in Petronas to be divided between the federal government and the non-oil producing states.

He added that if this was the case, the people of Sabah will be as rich as their counterparts in Brunei.