Petronas urged to clarify oil royalty statement
KOTA KINABALU 14/10/2012: A call was made for Petronas to provide further explanation over its recent refusal to meet the request to increase the oil royalty payment to Sabah.
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said he had expressed his desire to hear what the Malaysian-owned oil and gas company had to say before making further statement.
Speaking to reporters after presenting an allocation amounting RM34,784,145 to 95 primary and secondary mission schools statewide and three from Labuan here yesterday, he said Petronas had gone into petroleum sharing contract with oil companies that involved certain terms and conditions related to this.
He however believed that despite the agreed terms and conditions, there could be a chance for the oil royalty to be increased.
“I think there are certain things, which I call the ‘hanging fruits’, with regard to the oil royalty. Currently, the oil royalty is five per cent each for Sabah and Sarawak, and I think these are the areas that we must first walk on,” he said.
In a recent statement by Minister of Finance II, Datuk Seri Ahmad Husni Mohamad Hanadzlah, he disclosed that the sustainability of Petronas’ ability to contribute to the nation will come into question should royalty payments to the states be increased from the present five per cent to 20 per cent.
This increase will result in lower petroleum income tax payments, and that its profits will also be reduced, thereby potentially affecting its ability to pay dividends to its shareholder.
He disclosed that the increase in royalty payments would also reduce the profitability and economic viability of all current and future oil and gas projects under development, thus deterring Petronas and PSC contractors from further investing in these projects.
Over the next five years, planned projects with a total capital expenditure worth approximately RM170 billion are at risk of being canceled.
Meanwhile, on another development, Dompok called on the police to take action following reports lodged over the insult on the Sumazau, claiming it as a cult dance.
“The complainants have the right to know what had been done, they want results,” said Dompok.
Allegation was made in the suarapakatanrakyat.com website, posting a photo of Prime Minister Datuk Seri Najib Tun Razak and wife Datin Seri Rosmah Mansor, doing the Sumazau, describing it as a worship dance.
The claim has irked many, and politicians from both the government and opposition, had lodged police reports calling for thorough investigations into the claims, as posted on Facebook.
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