Kelantan ineligible as Emergency Ordinance still in force

(Bernama) – Kelantan is not entitled to claim oil royalty outside its territorial waters because the Emergency (Essential Powers) Ordinance 1969 is still enforced, said a law practitioner.

Datuk Mohd Hafarizam Harun said provision No.7 of the Ordinance stipulated that the state’s boundary which is the state’s land mass and its territorial waters stretched three nautical miles measured from the low-tide water mark.

However, two oil wells disputed by the Kelantan state government are located outside the ‘area’.

“To my knowledge, the Emergency (Essential Powers) Ordinance 1969 is still in force and has not been abolished by the government. In fact, there are Ordinances formulated at that time, such as ESCAR (Essential (Security Cases) Regulations 1975), which are still in force,” he said when contacted by BERNAMA, here today.

He was commenting on the statement by former Sarawak chief minister Tun Abdul Rahman Yakub, who supported the stand of the Federal Government that the State Government was not entitled to claim the oil royalty unless it could prove that the state’s territorial waters exceeded three nautical miles.

Hafarizam said the provisions such as ESCAR which was used to prosecute 29 members of the militant group Al-Maunah in the year 2,000 for treason by going against the government which was elected democratically, proved that the provision which was formulated then had yet to be abolished.

Previously, the Kelantan government had insisted on claiming the royalty payment running into billions of ringgit from the federal government for the oil explorations carried out in its waters, but the state was found to be ineligible under the existing law.

The two oil wells disputed are located in an area 150 nautical miles from the Kelantan waters in the overlapping continental shelf in the Gulf of Siam, South China Sea, which was developed jointly with the Malaysia-Thailand Joint Development Area (MTJDA) since 1979.

A news portal today quoted Abdul Rahman as saying that Sarawak was eligible to receive the oil royalty because Queen Elizabeth had declared in 1954 that “the east Malaysian state’s territorial waters extended beyond the three-nautical-mile limit”.

This led to the position of the law on the matter being different between the states in Peninsular Malaysia and Sabah and Sarawak which also signed the agreement with Petronas in 1975/1976, under the Petroleum Development Act 1974.

The Kelantan state government submitted that based on the Petroleum Development Act 1974, the state was eligible to receive five per cent oil royalty from the volume produced by the two wells concerned besides the possibility of taking the matter to court.

The federal government agreed to give a compassionate payment of RM20 million which was also five per cent of the gas production since May 2008 in an area known as Block PM301, located near the state’s waters.