Wednesday, June 4, 2014

See Chee How: Call for Federal Government deadline on 20% oil and gas royalty discussion


Kuching, 03 June 2014

Press Statement

The federal government must set down the deadline for the discussion of the paying of 20% oil and gas royalty to Sarawak and the other 3 oil producing states of Sabah, Kelantan and Terengganu.

The mechanism of paying the 20% oil and gas royalty to Sarawak and the 3 other oil producing states must be transparent and accountable.

In principle, we will not agree to the payment of oil and gas royalty in the form of development grants. The federal and state government must be clear with the distinction of these 2. The royalty is our entitlement as of right, but the development grants are basically hand-outs from the federal government, as has been and is the practice of the BN government.

If the state government is to agree with the federal government in their suggestion to make payment of oil and gas royalty in the form of development grants, the Sarawak State Assembly must be shown audited accounts of such payments and be assured that the additional payment of the oil and gas royalty are over and above the present development grants that are allocated to Sarawak and the other 3 oil producing states.

This is to ensure that the federal government will not make use of the development grants to gloss over the rightful entitlement of Sarawak in the form of royalty.

The state government must demand for shares of equity and direct participation in the Production Sharing Contracts (PSCs) involving the exploitation and production of oil and gas and related products in Sarawak.

We call on the federal and state government to reveal:
1. The number of PSCs signed between Petronas and PSC contractors affecting Sarawak;
2. The total value of the PSCs affecting Sarawak;
3. The equity holdings of Sarawak in these PSCs as at present;
4. The value of entitlements of Sarawak in the profits of these PSCs;
5. The equity holdings of Sarawak in PSC downstream industries as at present; and
6. The value of entitlements of Sarawak in the profits of these PSCs downstream industries.

We call on the state government to demand for such equity holdings, through a state-owned sovereign wealth fund (SWF), when the PSCs are up for negotiation for extension of their usual 15 or 20 years term.

Immediately, we must ask for the state’s share of ownership, through the sovereign wealth fund (SWF), in the downstream industries such as contracts for infrastructural facilities and all forms of maintenance support.

See Chee How
PKR Sarawak state Vice Chairman
State Assemblyman for Batu Lintang

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