Petronas giving lame excuses, should surrender ownership of oil and gas

The Petroleum Development Act, according to Jeffrey Kitingan, is inherently unconstitutional and therefore the oil agreement is invalid.

KOTA KINABALU - Petronas should, for starters, surrender ownership of the oil and gas resources in Sabah and Sarawak to their respective Governments instead of clouding the issue by belabouring why the oil royalty cannot be increased from the present measly five per cent to a respectable 20 per cent as demanded.

Star Sabah chairman Jeffrey Kitingan, in giving this response to a Petronas statement here on Wednesday, reiterated that the crux of the issue was ownership and not the oil royalty issue per se. The statement lamented that Petronas would not be a ongoing concern if oil royalty was increased to 20 per cent.

The key to the long simmering oil issue, he stressed, was the Federal Government surrendering Petronas to the Sabah and Sarawak Governments and other oil states.

“Natural resources, under the Federal Constitution, belong to the state and not the Federal Government,” said Jeffrey, also the state assemblyman for Bingkor. “As the resource owner, the state is therefore constitutionally entitled to collect royalties under the Land Ordinance, Section 24(3), Cap. 68.

He does not think that the Land Ordinance has been invalidated by the Petroleum Development Act 1974 (PDA) under which the oil agreements were signed with the Sabah and Sarawak Governments in 1976.

The PDA, according to Jeffrey, is inherently unconstitutional and therefore the oil agreement is invalid.

He conceded that the Court is yet to rule on the constitutionality or otherwise of the PDA.

No more lame excuses from Petronas and the Federal Government, please

Taking up the cudgels again, he said the 5 per cent whatever it’s called – oil royalty or cash payment – is no longer acceptable. “It’s tantamount to robbery and is grossly unjust,” fumed Jeffrey.

He recalled that the Sabah Government used to collect 12 per cent oil royalty from four companies from as early as 1971 i.e. well before the oil agreement was signed. Even this 12 per cent was not followed by the oil agreement, he added.

“We no longer want to hear lame excuses from Petronas and the Federal Government,” said Jeffrey in hinting that the clock is ticking.

By Joe Fernandez