THE 'TIME IS DEFINITELY RIPE” FOR A COMPREHENSIVE REVIEW OF THE 1974 PETROLEUM ACT. - VK LIEW

Brazen LDP joins chorus for oil review

KOTA KINABALU May 24, 2011: Sabah Barisan Nasional (BN) members are making bold calls for an amendment to the Petroleum Development Act 1974, to better serve Sabah.

The latest call came from the Liberal Democratic Party (LDP), which said it was time the resource rich state got a fairer deal from in the distribution of its own wealth.

Despite its natural wealth, Sabah is reportedly the poorest state in the country.

LDP joined the chorus on Sunday after fellow BN components Parti Bersatu Sabah (PBS) and United Pasokmomogun Kadazandusun Murut Organisation (Upko), issued statements urging the BN-led federal government to make changes to the Act to allow Sabah to get a bigger share of the resource.

Said LDP president VK Liew: “Thirty-seven years is a long time. A lot has taken place since in our state.

“The time is definitely ripe for a comprehensive review of the agreement reached between the state government and Petronas with regard to the cash payment in consideration of the ownership and the rights, powers, liberties and privileges given to Petronas under the 1974 Act.

“At the same time, we must also be able to negotiate in earnest the development of downstream industries as well as development of petroleum products to cater for our own industry players.”

Liew was speaking to reporters in Sandakan during his monthly mobile service meeting with his constituents.

There have been more vocal calls by BN politicians of late following a statement by the Sabah Oil and Gas Contractors Association pointing out that the Petroleum Development Act sidelines local companies involved in the oil industry.

Liew said that a lot has changed since the time the Petroleum Development Act was passed by Parliament in 1974 which provided for exploration and exploitation of petroleum on and offshore by the national oil company.

No exception

Under the Act, Petronas was given the entire ownership, rights, liberties and power to control and carry out explorations, and develop downstream activities and petroleum-related products.

Liew said the across-the-board rights were granted to Petronas in return for 5% cash payment to the state for the exploration and exploitation of petroleum “in our jurisdiction”.

However, the 5% cash payment is now being questioned.

“We have been voicing our concerns that such cash payment made to the state does not reflect the proportion of petroleum explored and exploited from our shores.

“Kelantan and Trengganu have been consistent in pursuing for more rights, powers and privileges in respect of petroleum explored and exploited in their shores.

“We are no exception except in the case of Kelantan, it has even pursued its claims in the court,” he said.

Liew added that as a result of Petronas monopoly, little downstream activities related to development of petroleum productst were being carried out in Sabah.

“This is a far cry from what the law has provided.

“Now that we have oil and gas exploration being carried out in Kimanis, it is only right that we should have more of the downstream activities and petroleum developments to cater for the expansion in this industry,” he said.

“To bring attention to our plight, we should have more and better qualified representation from Sabah to sit in the National Petroleum Advisory Council.

“We can express our views more productively,” he added.