KUALA LUMPUR, Nov 12 — Kelantan PAS Youth chief Abdul Latif Abdul Rahman handed over a memorandum on the state’s oil royalty to Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz today.
PAS said the oil royalty should not be politicised and referred to the parliamentary debate of the Petroleum Development Act by Tun Abdul Rahman Ya’kub on Nov 24, 1974.
According to the Hansard, the then Sarawak chief minister said that the state has the right of power, freedom and privilege to petroleum not only on land but also offshore including the continental shelf.
“I am extremely happy that in this Bill is a recognition to this right as Petronas will provide cash payments to the government concerned,” he said in the Hansard.
Then Prime Minister Tun Abdul Razak during the debate also said that every state will receive five per cent from the value of petroleum found and obtained in the area and obtained within the coastal border or outside the coastal borders of the state.
Prime Minister Datuk Seri Najib Razak had told Parliament that Kelantan has no right to ask for royalty given that the oil was not extracted within three nautical miles of its coastline.
Kelantan PAS Youth demanded that Najib retract his statement that the government would only contribute “goodwill payment” to the state.
The Youth wing also wants Najib to make a public apology to the people of Kelantan for denying their right to the oil royalty.
The Prime Minister sparked an uproar when he announced that the BN federal government will pay Kelantan “goodwill payment” for oil extracted in its waters instead of oil royalty.
PAS lawmakers are disputing the “goodwill payment”, saying that it is akin to receiving alms.
Kelantan, which has been under PAS since 1990, began seeking the oil royalty recently although the Cakerawala gas field began production in January 2005.
The entire 7,250 sq-km area in the Gulf of Thailand, in the oil-rich South China Sea, is called the Malaysia-Thailand Joint Development Area (JDA).
The JDA was created as an interim measure to exploit the natural resources on the seabed or continental shelf claimed by the two countries, with the proceeds shared equally.
The arrangement does not extinguish the legal right to claims by both countries over the area. This is one of the first applications of the joint development principle in territorial disputes in the world.
The two countries signed a memorandum of understanding on Feb 21, 1979 in Chiang Mai for joint development and later on May 30, 1990 in Kuala Lumpur to constitute the joint development authority.
As of the end of 2007, approximately 8.5 trillion standard cubic feet of gas reserves (proved and probable) from 22 fields in the area have been discovered.
The oil royalty issue was first brought up by PAS’s Datuk Husam Musa in 2001. This year, the issue was raised by PAS MPs in Parliament again, as Kelantan was found listed in the Statistics Department's State/District Data Bank as one of the four oil- and gas-producing states.
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