‘We can no longer compromise on oil’
Jeffrey Kitingan’s State Reform Party (Star) is proposing a complete reform of the current oil and gas arrangement with Sabah.
This is among several points listed in the party’s ‘Petroleum Masterplan’ which was unveiled here yesterday.
According to Kitingan the “rights of Sabah and the welfare of the people can no longer be compromised by the continued exploitation of its oil resources at the expense of the people of Sabah.”
“We cannot rely on and cannot depend on outsiders to decide on Sabah’s oil and gas resources which belong to all Sabahans.”
Kitingan said the masterplan was conceived based on the rationale that “Sabah Oil and Gas Resources Belongs to All Sabahans”.
The masterplan, he said also included a review of the cash royalty payment from the current 5% to 50%, establishment of PetroSabah Corporation and the PetroSabah Wealth Fund and a Sabah Petroleum Advisory Council.
Explaining further, he said the Sabah Petroleum Advisory Council will advise on and oversee the planning and policies for Sabah’s oil and gas resources, while PetroSabah Corporation will spearhead the development of the oil and gas industry in Sabah.
“Getting only 5% from its oil resources is no longer acceptable today. If this continues, Sabah will continue to remain as the poorest state in Malaysia.
“The masterplan will involve a three-pronged strategy that will seek a review of the existing arrangements on Sabah’s oil and gas resources.
“It will also look at the overall development of a oil and gas industry in Sabah and the utilization of the oil and gas resources for Sabah and Sabahans first and the preservation and investment of the oil revenue for the well-being of Sabahans and for the future generations,” Kitingan explained.
He promised that under such a plan, Sabahans will enjoy cheaper petrol, diesel and gas products, lower electricity rates and enjoy annual grants from revenues generated from the state’s oil and gas.
Review of Kimanis-Bintulu pipeline
He said Star also porposed that special tax incentives be given to oil and gas-powered plants in Sabah and that the federal government give PetroSabah Corporation tax-exempt status.
Kitingan said the master plan also recognized the fact that oil and gas are fast depleting resources and will be exhausted in future despite recent announcements of new oil and gas finds off the coast of Sabah.
“Bearing this in mind, the third strategy of the master plan will be seek to invest some of the oil and gas revenues and at the same time to provide for the benefit and well-being of Sabahans.
“The oil and gas revenues need to be conserved and invested for the future of Sabah and all Sabahans and cannot be wholly used in the annual state budget as currently practiced by the government,” he said.
He added that a “PetroSabah Wealth Fund” will also be established under the master plan.
The fund will be entrusted to invest Sabah’s oil and gas revenues for the future generations. The investment guidelines and criteria will be formulated by the Advisory Council.
“It is proposed that 12.5% of the annual profits of PetroSabah Corporation be set aside to provide for Sabahans and another 25% will be invested in the PetroSabah Wealth Fund,” he proposed.
Kitingan did not leave out the controversial RM3.5billion Kimanis-Bintulu Gas pipeline project.
The pipeline will channel gas from Sabah to Sarawak leaving little for Sabah. Kitingan also noted that Blocks L&M have been signed away by the federal government to Brunei and that little was known of the oil dealings over Labuan, which was once part of Sabah and is now a Federal Territory.
Petronas must be accountable
Kitingan said the master plan will also review the pipeline project and assurances given by Petronas and the federal government inclusive of the guarantee to leave sufficient gas for Sabah’s use and review of sales tax revenue on oil and gas products in Sabah.
The proposal also includes a request to the Federal Government for a special subsidy for petroleum products equivalent to the volume of oil extracted from Sabah for consumers in Sabah.
“Sabah consumers should pay less for petrol, diesel and gas products compared to their counterparts in Semenanjung,” said Kitingan who noted that following the 1976 air crash tragedy which killed then Chief Minister Fuad Stephens and several senior members of the cabinet, the state government had signed away 100% of the state’s oil and gas resources.
It even gave up the collection of its 5% oil royalties and accepted a cash payment under the Petroleum Development Act, 1974.
“If Sabah had not waived collecting the 5% oil royalties, today, Sabah will be receiving at least 10% of the revenue from its oil resources, 5% oil royalties and 5% cash payment,” he said.
He noted that in 2012, Petronas is expected to receive RM14.734 billion from Sabah oil resources while Sabah will receive only RM0.775 billion and none is specifically invested for future generations.
“The present day system of secrecy, non-transparency and non-accountability will be abolished.
“Petronas will have to be accountable to the people of Sabah for Sabah’s oil and gas resources,” said Kitingan.
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