G5 states to jointly battle for oil royalty?
(fz.com) – The combined electoral weight of the five states – Kelantan, Terengganu, Pahang, Sabah and Sarawak – is enough to make their wishes heeded, Husam argues. The five states have a total 92 parliamentary seats with over 3.5 million voters.
From championing solely Kelantan’s bid for oil royalty, PAS leader Datuk Husam Musa plans to expand the crusade to all five oil-rich states to leverage on their collective political clout.
Mooting a grouping of five resource-rich states, or G5, Husam aims to get them to present a united stand when negotiating on oil royalty issues with the federal government, he told fz.com in a recent interview.
The combined electoral weight of the five states – Kelantan, Terengganu, Pahang, Sabah and Sarawak – is enough to make their wishes heeded, Husam argues. The five states have a total 92 parliamentary seats with over 3.5 million voters.
“People from these five states must unite if they understand their rights and object to what the federal government practices now,” he says.
“They can use their standing during the general election. Certainly, 92 seats is a very large force,” said Husam, who is Kelantan’s state executive council member. That makes up a substantial 41.4% of the 222 seats in Parliament.
Of the five states, only Kelantan is currently governed by the Pakatan Rakyat (PR) while the other four states are ruled by the Barisan Nasional (BN).
Still, the federal opposition hopes that issues like oil royalty payments can help it gain ground in these states.
Husam plans to tour the five states to introduce his G5 concept and to push for higher oil royalty payments of up to 20% of the value of the oil produced in the respective states.
It is unclear how much traction Husam and Pakatan can gain with the demand for 20% in oil royalties since the agreements signed with the national oil company Petroliam Nasional Bhd (Petronas) has set payment at 5% of the value of the oil produced in the states.
Petronas pays the federal government another 5% for production of the liquid gold.
Both Petronas and Minister of Finance II Datuk Seri Ahmad Husni Mohamad have warned that increasing the royalty payments could strain Petronas’ economic viability and impede future investments.
Scepticism over new territorial law
Using the G5 platform, Husam plans to warn chief ministers and menteris besar of the potential danger of the Territorial Sea Act 2012 which parliament passed last year.
In particular, Section 4 of the Act provides for the sovereignty of the territorial sea, in respect of its bed and subsoil, to be vested in the Yang di-Pertuan Agong.
Husam fears that Section 4 can be invoked by the federal government to lay claim to resources under the sea bed, thus undermining the states’ claims to oil and gas resources.
“I have drafted a letter to all the states so that they are aware that this Act will undermine their state’s position. I suggest that they reject the new law.
“If you want to alter any boundary, you need to go through the state assembly and Council of Rulers. This Act is not applicable until the state assembly approves it,” said Husam, who is Salor assemblyman.
The new legislation was introduced to specify Malaysia’s territorial sea limit of 12 nautical miles after the 1969 Proclamation of Emergency was annulled in December 2011.
Previously, the Emergency Ordinance No 7 1969 had set three nautical miles as Malaysia’s territorial sea limit.
The federal government has hitherto relied on the Emergency Ordinance to strengthen its argument that Kelantan can lay no claim to the petroleum produced off the state’s shore as the resource was found beyond three nautical miles.
But Kelantan disagrees.
“The Emergency Ordinance is purely on the administration of the sea in case of external threats. It has nothing to do with petroleum,” Husam said.
Fairness between states
Apart from securing oil royalty payments for Kelantan, Husam’s mission is to ensure that Petronas pays oil royalty directly into the states’ coffers so that there is more transparency in the way the funds as spent.
There appears to be little uniformity when it comes to oil royalty payments to oil-producing states.
