‘Give us back 50 sen on every oil-derived ringgit’

Queville To 

Sabah oil and gas contractors are proposing that an institution be set up to protect the industry in the state.

KOTA KINABALU: The Sabah Oil and Gas Contractors Association (Sogca) wants Sabahans to look beyond the 5% oil royalty which the state is currently receiving from Petronas and instead seek at least half of every ringgit that is made from its oil and gas exports.



“We should not be asking for the royalty or the (oil) blocks… that’s secondary. We should be asking that for every ringgit taken from our oil revenue, at least 50 sen or 30 sen be given back to us, either directly or indirectly. That would be much fairer,” said Iskandar Malik, its president.

He also mocked local leaders for believing they had accomplished something important and triumphantly proclaiming to the media as though it was a coup whenever Petronas announced that it was giving some huge projects to Sabah.

Iskandar explained that this is because in one way or other, Petronas would still make its money out of Sabah people.

He said the fact remained that on average, the people of Sabah are spending about RM180 million per month on oil and gas based on a conservative estimate that some two million consumers in the state are spending an average of RM3 per day either on electricity consumption or on gas for transport and other use.

“In other words, we in Sabah are actually buying back our own oil and gas at RM2 billion a year. Hence it is only fair that Petronas should award the contracts to us directly, and not through other channels like the middle men or so-called foreign experts,” he said.

Noting that that the truth of the oil and gas business lies in the number of barrels of oil the state produces daily, Iskandar questioned how many barrels were Sabahans allowed to sell directly as traders.

“Not even one drop of it. That’s the sad truth,” he said, adding that Sabah currently produces 200,000 barrels of oil daily.

He also reminded that Sabah’s existing 2.3 billion barrels of oil reserve is expected to last “a very short period” of 43 years.

O&G institution needed

But with such valuable resources, Sabah should not be poorer than the other Malaysian states which do not possess much natural resources, he added.

Iskandar proposed that an institution be set up to act as the “official spokesman” for the state government on the oil and gas industry.

This would save the state government from continuous embarrassment stemming from the unprofessional statements made by some state leaders and politicians, he said.

He added that with such an institution, state leaders in future would not end up a laughing stock whenever they made statements or comments on the industry.

He was commenting on the penchant of Sabah politicians, from both sides of the divide, to comment on the thorny oil royalty issue which had been troubling the state ever since former chief minister Harris Salleh signed over Sabah’s oil and gas wealth to Petronas in 1976.