Sabah’s oil curse strikes again

Poverty-riddled Sabah is the sixth biggest contributor to the national economy, contributing more than a quarter of the total oil and gas produced in the country. 

Queville To, FMT

Sabah lost control of its oil wealth more than 30 years ago but the fallout of the widely acknowledged cock-eyed contract is continuing to roil business dealings in the state.

The state Barisan Nasional government is now facing more questions over how it is managing the Petronas-sponsored Sabah Oil and Gas Terminal (SOGT) project that began more than a year ago.

The Sabah Progressive Party (SAPP) has accused Chief Minister Musa Aman’s Umno-led BN government of failing to safeguard the interest of the local companies in the ongoing multi-billion-ringgit project.

Melanie Chia, the party’s outspoken women’s wing chief said there appeared to be no attempt by the state government to ensure locals get a bigger share of the spin-offs from the SOGT project.

She said they had since discovered that the main contract work had been handed over to a Sarawak company which had in turn subcontracted the job valued at RM2.4 billion to a South Korean company to the extent that even the canteen at the site was operated by Koreans.

She noted that while 35 companies with Sabah connections had obtained sub-contract works, the value of these contracts totaled a fraction of the value of the main contract.

“The total value of these sub contract works is only RM470million, or a mere 19.6 per cent of the total contract value of RM2.4 billion. Even the Kimanis new township will be developed by Miri- based Homelite Development Sdn Bhd.

“I don’t believe that we do not have enough local companies who can do the jobs. We also have very established and esteemed developers who can develop the new township.

“Do we have to be subservient and remain playing second fiddle all the time even in our own state?” she asked.

Sabah’s oil reserve

Chia, who is also Luyang assemblywoman, posed the question during a public talk themed ‘Sabah’s Future’ organised by the SAPP Luyang Central Liaison Committee here over the weekend.

She said the issue of out-of-state companies not only taking the lion’s share of the SOGT work and then sub-contracting it out to foreign companies needed to be studied.

“The government owes the people a good explanation as to why Sabah remains the poorest state in Malaysia despite being blessed with abundance of natural resources,” she added.

The state is the sixth biggest contributor to the national economy, contributing more than a quarter of the total oil and gas produced in the country.

Sabah’s oil reserve were calculated at 1.5 billion barrels as of last year but new oil fields discovered since then have raised the estimate substantially. Gas reserves stand at 11 trillion cubic feet with four new oil fields found in the Sabah waters in the last two years.

The projected production from one area, the Gumusat/Kakap Project, is 135,000 barrels per day will come on stream soon, but Sabah’s share is unknown as other oil producing companies are in on the project with Petronas on a contract sharing basis.

SAPP and the opposition have been hitting on the wealth extraction from the state and at the same time holding up its high poverty rate and unemployment figures.

Sabah has the highest number of unemployed in the country at 5.6% or 76,000 people without jobs.

The opposition says that the ruling coalition government has had almost 20 uninterrupted years of power in the state but has yet to come up with a coherent and comprehensive development policy to ensure the state’s well-being well into the future.

“Obviously something is not right with the present government otherwise Sabah would not end up the poorest despite having abundance of oil and gas,” Chia said.