Anwar seeks to amend Petroleum Act

(Free Malaysia Today) – Opposition Leader Anwar Ibrahim (picture) is presenting a Private Member Bill  proposing to amend the Petroleum Development Act.

He is seeking an amendment to Section 10 of the act so that states will clearly have their rights stipulated for a greater share of offshore oil from the federal government.

The amendment is by way of  inserting a Section 10A which defines “offshore” as a portion of  open sea that falls within the limit of the Exclusive Economic Zone of the Federation and measured in accordance to the relevant laws adopted by the Federation at a particular time.

The bill states that:

+ The current controversy surrounding the issue of royalty from oil extraction activities offshore the states of Malaysia arises due to the ambiguity surrounding the word “offshore” in the Petroleum Development Act 1974

+ The word “offshore” was referred to 3 times in the act; however, it is not defined anywhere in the act

+ Because the act was drawn up to lay down, among others, the terms of reference for the surrender of rights over hydrocarbon resources from the states to the Federal Government, it is only logical that by “offshore” this refers to all petroleum activities carried out in a state at the particular time this act was drafted, i.e. including those oil fields offshore of Terengganu beyond the 3 nautical miles argument

+ The 3 nautical mile boundary only came to the picture by way of inference, due to the ambiguity of the definition of the word “offshore”; the BN government falls back to the definition of the territorial waters contained in the Emergency Ordinance Act 1969 to draw the distinction between the boundary to which “offshore” (mentioned in PDA 1974) shall be limited to.

The amendment intends to clarify the word “offshore”  so that it reflects “the true intent and the spirit of the PDA 1974 when it was drawn up and the mutual understanding between the states and the Federal Government when the former agreed to surrender their claims over hydrocarbon resources,” according to the preamble.