The Malaysian Insider

Their mission gave Prime Minister Datuk Seri Najib Razak a new headache in Kelantan — although some themselves returned seasick.

Malaysia produces oil and gas offshore, in the South China Sea, and a growing number of Kelantan residents feel that the federal government owes the east coast state at least RM1.7 billion in “oil royalties”.

Ten leaders of PAS and PKR went on the watery expedition on Tuesday to make that point.

The rest were mostly journalists, bloggers and PAS members from Kelantan, a state that has remained in PAS hands for 19 years.

Kelantan's deputy speaker Zaki Ibrahim led the mission and state executive councillor Husam Musa was also on one boat.

The two fishing boats and one decommissioned navy boat sailed from two jetties in Kelantan.

Tabloid reporter Khairi Mohamad, who went on the trip, was quoted as saying in a newspaper: “The trip was a harrowing experience and almost all of us suffered from severe seasickness.”

Malaysia extracts hydrocarbon resources from Sabah, Sarawak, Terengganu and Pahang.

Each receives a 5 per cent royalty a year from the federal government based on the values of the deposits brought out.

Most Malaysians refer to this simply as an “oil royalty”.

Terengganu, next to Kelantan, has been receiving from RM800 million to RM1 billion a year for as long as anyone can remember.

The money is used to build roads, schools and public buildings as well as pay salaries of state civil servants.

When Terengganu fell to PAS in the 1999 general election, then-Prime Minister Tun dr Mahathir Mohamad almost immediately decided not to pay the royalty to the state government of the day.

Despite loud protests by PAS, Dr Mahathir said the royalty belonged to the people of Terengganu. He renamed the royalty “wang ehsan” (compassionate funds) and handed the money to Terengganu Umno leaders to manage.

When Umno and the Barisan Nasional (BN) took back Terengganu in the 2004 general election, the funds were renamed the oil royalty and handed again to state Umno chiefs.

Kelantan fell to the Islamist party PAS in 1990 — in the early days of offshore oil drilling in Malaysia led by national oil firm Petroliam Nasional (Petronas).

Thus, the federal government, helmed by the BN coalition, has never paid Kelantan any oil royalty.

Its argument: the hydrocarbon resources are in the Thai-Malaysia Joint Development Area (JDA), a wide expanse of sea in which Malaysia's and Thailand's territories overlap. They are thus not in Kelantan waters.

The revenues are kept by the federal government.

But PAS claims this is unfair and has been pushing for the royalties, even if the drillings are in the JDA. It says that even in the JDA, the area is within Kelantan's territorial waters.

In the run-up to the March general election last year, PAS released hydrocarbon drilling maps — said by PAS to be Petronas maps obtained unofficially. The maps, if indeed accurate, show that some of the drilling is done in Kelantan territory.

Some of the maps were recently posted by an aide of Husam in his popular blog kickdefella. wordpress.com.

PAS claims that the federal government owed Kelantan at least RM1.7 billion, based on documents linked to the drillings it has received.

The Islamist party received a big boost several weeks ago when Kelantan prince and respected Umno leader Tengku Razaleigh Hamzah backed its claims. The long-serving MP had served as Petronas chairman in its early years.

“If I were still chairman of Petronas, I would pay without all the fuss,” he told The Malaysian Insider website in an interview last month.

“And I feel all the more it should be paid because I signed the agreement.

“There is no two ways about it. It must be paid.”

Two weeks ago, he revealed his reply to a letter from Kelantan Mentri Besar Datuk Nik Aziz Nik Mat about the oil royalty.

Tengku Razaleigh wrote: “Petronas must pay the Kelantan state government the cash payment of 5 per cent of the value of petroleum resources extracted from Malaysian waters offshore (of) Kelantan.”

It was with this background that the three boats set sail for a gas rig in the Cakerawala field in the South China Sea.

Husam said in his blog last Thursday that the Cakerawala (Malay for “constellation”) is located 153km offshore and is thus “confirmed” to be within Kelantan's territory.

And he said three other fields — Lawit, Jerneh and Bintang — are just 68km from the Kelantan shoreline.

“There is no more reason for the federal government to give excuses on the royalty because it is indeed the right of the people of the state,” wrote Husam, who has been told to handle the royalty issue by the Kelantan government.

The federal government has not commented on Tengku Razaleigh's comments or the boat trip but last week's voyage has certainly stirred up waves of support in Kelantan. — The Straits Times

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