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Thread: Can We Trust UMNO? Kelantan cheated of oil royalty

  1. #1
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    Oct 2008

    Can We Trust UMNO? Kelantan cheated of oil royalty

    He's trying to pull the stunt that Mahathir did to Terengganu when PAS took the state in 1999. Won't work this time, with 4 states under PR and the people determined to send UMNO packing.

    PAS claims Najib blundered in justifying “goodwill payment”

    By Syed Jaymal Zahiid

    KUALA LUMPUR, Nov 5 — Prime Minister Datuk Seri Najib Razak may have made a blunder when he claimed that Kelantan has no right to ask for royalty given that oil was extracted beyond the state’s waters in Parliament yesterday.

    Najib had told Parliament that Kelantan could only demand for royalty if oil was extracted within three nautical miles of its coastline.

    But PAS leaders said today that this meant Sabah and Sarawak, where oil is extracted beyond their territorial waters, have not been receiving royalties for its oil but “goodwill payment”, similar to both Kelantan and Terengganu.

    This means that all this while these two states have been receiving goodwill payment for its oil and not royalty despite Petronas’ financial report which clearly states that Sabah and Sarawak have been receiving royalty,” Kuala Krai PAS lawmaker Dr Hatta Ramli told a press conference in Parliament.

    This also means that oil profit is distributed according to the whims and fancy of the federal government and Section 144 of the National Petroleum Act which stipulates that 50 per cent of oil profit be given to oil producing states is obsolete,” he added.

    Shah Alam PAS parliamentarian Khalid Samad said the paradoxical interpretation by Najib has dangerous repercussions as the Barisan Nasional (BN) Federal Government had the sole power to decide if oil-producing states can reap profits from its own resources.

    Khalid added that leaders representing Sabahans and Sarawakians had failed to defend what is rightfully theirs.

    He urged them to press Najib now for a clear stand on this matter.

    Kelantan, ruled by 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 in the seabed or continental shelf claimed by the two countries, with the proceeds shared equally.

    Najib had announced yesterday that Kelantan would be receiving goodwill payment for its oil instead of royalty and PAS leaders have blasted this and said the move was akin to calling the people of Kelantan “beggars.” TheMalaysiaInsider....

  2. #2
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    Oct 2008

    Re: Najib: Kelantan oil royalty transformed to 'goodwill payment'

    Is this Najib's 1Malaysia or 1BigMalaysia Bullshit? By breaching the Petroleum Development Act, Najib is giving Kelantan an excuse to repudiate the agreement between Kelantan and Petronas.

    Lim Kit Siang Press Conference on Kelantan Oil Royalty, 16th Nov 2009:

    Lim said this clearly contradicted the answer given 24 years ago by Najib’s father, Tun Razak when he replied to the opposition leader’s question as the second Prime Minister in Parliament on the same issue in 1975.

    According to the Parliament Hansard of Nov 12, 1975, Lim had asked the prime minister then whether all states in Peninsular Malaysia, Sarawak and Sabah had signed agreements with Petronas for oil exploration along the coastline and what were the joint profits for the states.

    Tun Razak had said then: “All states in Malaysia, except Sabah and Selangor, have signed the agreement with Petronas under the Petroleum Development Act 1974. I have been informed that Selangor have agreed to sign the agreement.

    “Under the agreement, each state will receive 5 per cent of the value of petroleum found and extracted from each of the states, whether onshore or offshore, that is sold by Petronas or agencies or contractors.”

    “I called on the son and the sixth Prime Minister to keep to the commitment by the father and the second Prime Minister that Kelantan and Trengganu are entitled to 5 per cent oil royalty for petroleum ‘whether onshore or offshore’ as stipulated in the Petroleum Development Act 1974,” Lim said.

    He noted that one of the Act’s architects is Gua Musang MP Tengku Razaleigh Hamzah, who had spoken up on the legal rights of Kelantan and Terengganu to 5 per cent oil royalty for petroleum produced offshore and not as “wang ehsan” or compassionate payment.

    “Otherwise, Najib’s 1Malaysia would be sheer mockery if the legal rights and status of states to oil royalty is politicised to depend on whether Umno/Barisan Nasional controls the state government, as happened to Terengganu and Kelantan,” he added.

    The federal government has argued that oil and gas extraction activities are located about 150km off Kelantan’s shores and is jointly developed with Thailand, and thus beyond the legal limit of state/national boundaries. Also, the territory is being disputed by Thailand and Malaysia.

    Kelantan, ruled by 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). TheMalaysiaInsider....

  3. #3
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    Oct 2008

    Re: Najib: Kelantan oil royalty - Ku Li: Royalty not prerogative of Federal Govt

    Oil money not prerogative of federal government, says Ku Li

    Wednesday, 18 November 2009 Super Admin

    (The Edge) - Former Petronas chairman Tengku Razaleigh Hamzah today stressed that the federal government was not at liberty to "distribute as largess" the proceeds from oil and gas production because such gains rightfully belonged to the people.

    Razaleigh told reporters that there was "no such thing" as wang ihsan or 'compassionate payments', referring to Prime Minister Datuk Seri Najib Tun Razak's announcement on Nov 3 that the federal government would pay wang ihsan to the Kelantan state government.

    "Oil is not for the federal government to distribute as largess. The government can distribute from the revenue collected from taxes, and that is the prerogative of the federal government, but when it comes to this, it is the right of the people," Razaleigh said. MalaysiaToday

  4. #4
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    Oct 2008

    Re: Najib: Kelantan oil royalty - Ku Li, striking oil has turned into a curse

    For Ku Li, striking oil has turned into a curse

    Aidila Razak, Dec 31, 09

    The 'go go years' are over and our 'oil lottery' money is fast depleting mainly due to mismanagement by the powers-that-be, decried veteran politician Tengku Razaleigh Hamzah,

    According to the Petronas founder, the original plans of the oil giant did not include over-producing oil to pay for billions of ringgit worth of unnecessary government projects.

    "It started with this (defence equipment purchase) agreement with (then British prime minister) Margaret Thatcher, and suddenly the production of oil was doubled from 650,000 barrels per day to over a million barrels a day (to fund the purchase). That was too much for us," he said.

    NONEAs one of the architects of the Malaysian oil blueprint, the Kelantan royal is now out to set things right, especially for his home state which he believes has the "sovereign right" to be paid royalty for oil found on its shores.

    "It's not a complicated issue for as long as oil is found along the shore of Kelantan, whether it's in the joint development area or whether it is off-shore in the exclusive economic zone of the country, Petronas is obliged to pay," he said.

    Another matter which needs to be addressed is the arrangement between the states and the centre, which Razaleigh said is outdated and cannot provide the revenue required to meet the development plans of each state.

    The former finance minister, who met with Malaysiakini last week, was unfazed by the warning from Deputy Prime Minister Muhyiddin Yassin not to accept an opposition invitation to head a parliamentary oil royalty caucus.

    NONERazaleigh said Muhyiddin can "climb to the top of the mountain" to warn him but it would not stop him from doing what is right.

    " I don't care who warns me. I'm doing this for the country; I'm not beholden to anybody. People can climb to the top of a mountain to warn me. I couldn't care less. I plan to see that the sovereign rights of the people are protected.

    The following are excerpts of the interview. Content has been edited for brevity.

    Malaysiakini: You gave a stinging speech arguing that Malaysia has "squandered" quite a lot of our oil money. What prompted you to give that speech?

    Razaleigh: It's because we will get caught flat-footed. What happens if the oil runs out? We have not planned to have substitute revenue in the event that we run out of oil revenue in the years to come.

    Some economists have put the amount of money already lost (due to mismanagement of oil revenue) at about RM100 billion... some estimate about RM350 billion, while others put it as RM500 billion.

    I can't put my finger on the numbers precisely because I don't have access to the accounts. But Dr Mahathir (Mohamad) has said something to the extent that there are some huge sums of money unaccounted for... missing...

    Was this in reference to the RM270 billion of oil revenue which Mahathir alleges to have been spent during the previous prime minister Abdullah Badawi's term?

    dr mahathir visit kuala pilah 020806 speakingI can't quite remember... but he did come up with the statement querying Petronas, asking, 'where has this money gone to?' The amount I referred to in my speech, (was the amount spent during the) time when (Mahathir) was in control of the company and Petronas.

    The amount that was utilised for all sorts of expenditure, including defence equipment which was purchased from Britain, for instance, amounted to RM7 billion.

    This was the defence purchase made with (former British prime minister) Margaret Thatcher at that time after (Mahathir and Thatcher) patched up. This was after Mahathir threatened to 'buy British last'. Forward contracts were being made to satisfy these purchases.
    Some people have said that surely you would have known that money was being "squandered" earlier. Why are you only bringing the matter up now?

    I would know? How would I know?

    You would know at least by looking at the mega-structures being built...

    No, those mega structures were built when I was not there. In I had already left the government.

    So why are you bringing this up now?

    Because I thought all this expenditure is too much to bear. Look at Putrajaya. If you go by the simple rule of thumb of 10 percent for maintenance alone, with the cost of RM40 billion, it's about RM4 billion a year. Where are you going to find that money?

    But in those days Mahathir said that we have the money.

    If we don't touch that money, it's always there, except the value may depreciate. But if you touch that money, it will no longer be there. That's the problem. Where will you find this RM4 billion to maintain Putrajaya... just to change light bulbs that have fused, paint that has peeled off?

    At one point in your speech, you said it would have been better if we didn't have oil money.

    We've got this income which is like a bonus, or something that fell from heaven. We seem to be over-relying on this money, knowing full well that we have only a small reserve and that reserve is fast depleting at the rate that we are exploiting our oil. I thought it was better to keep it underground and safe for the future generation.

    In fact, that was the plan with the inception of Petronas. That was why we had the Petroleum Development Council in order to guide Petronas in its exploration work, and the concessions that were relinquished by the oil companies back to us should be better planned before being given out for exploitation, mindful of the fact that oil is a fast depleting asset that is greatly in demand all over the world, especially by the industralised countries.

    What went wrong?

    I think it started with this (defence equipment purchase) agreement with Margaret Thatcher, and suddenly the production of oil was doubled from 650,000 barrels per day to over a million barrels a day. That was too much for us.

    About the issue of oil royalty in Kelantan, there are reports saying that there will be a big gathering in Kota Bharu.

    I don't know if it's big or small, or whether there will be a gathering at all, but I just want to appear in Kelantan because I come from Kelantan, and they say that I'm the man who started all this and therefore I owe it to them to go and explain what it all means.

    Basically it is a very simple explanation that I want to give. This is the sovereign right of the people, and if oil is found anywhere near the state concerned, then Petronas is duty-bound to pay five percent of profit from the oil to the state concerned. That is the bottom line of the agreement that was signed between Petronas and the various states in the country.

    It does not relate to where the oil is found, because as far as the state is concerned, when they vested their oil to Petronas, they did so with the understanding that Petronas will pay them 5 percent of the revenue, whether the oil is found in the state or outside of the state.

    So the federal government does not come into the picture at all. It's between Petronas and each of the states. As long as oil is found along the shore of Kelantan, whether it's in the joint development area or whether it is off-shore in the exclusive economic zone of the country, then Petronas is obliged to pay.

    It does not state if oil has to be found within three nautical miles or beyond three nautical miles or the 12 mile limit of the continental shelf. It just says, 'You vest the oil rights in your jurisdiction in us and we, Petronas, will pay you five percent.'

    Najib mentioned that it's not a big amount.

    Well, the amount relates to how much Petronas makes out of the off-shore area, if oil is indeed found in the off-shore area. If it is one cent then it is five percent of the one cent. If it's RM10 billion, it's five percent of the RM10 billion, if there's profit from oil.

    But has Kelantan ever been paid oil royalty?

    Not that I know of.

    Not even during the Barisan National rule?

    Statistics show that Petronas has been earning money out of oil exploited out of those off-shore areas, and partly in the joint-development area.

    You have been invited (by Pakatan Rakyat MPs) to be part of the oil royalty caucus in Parliament but you have yet given an answer.

    I have not given an answer simply because it has taken a partisan nature. It should be something that does not relate to party politics.

    Since PAS rules Kelantan, it should be two MPs from the opposition, and in the case of Sabah, Sarawak and Terengganu, they are ruled by the Barisan Nasional, let the BN MPs come on board. It's not a question of who is in the majority because we are not going to take a vote. It will only be a forum for discussion.

    But we also want to possibly look into the arrangement between the state and the power in the centre. It's high time to ask these questions.

    After all, the subject of allocation when the federation was formed in 1948 and subsequently in 1963 probably needs reviewing because things have become much more complex.

    The amount of money needed to cope with the development plans that we have for the various states and for the country has taken a different proportion now. The states don't have that kind of revenue.

    Let's look at it objectively, whether or not we could come to an arrangement for the revenue to be shared or the states can be given back some of the powers to raise money without having to look over their shoulders to see whether they can do so.

    What is the status of the caucus now?

    The status as it stands today is just an idea. I have spoken to (the MPs from oil-producing states, including Kelantan) whom I think should come on board, and they all have agreed.

    But you have been warned by Deputy Prime Minister Muhyiddin (Yasin) not to be part of the caucus.

    I don't care who warns me. I'm doing this for the country; I'm not beholden to anybody. People can climb to the top of a mountain to warn me. I couldn't care less. I plan to see that the sovereign rights of the people are protected. Malaysiakini. Subscription required.

  5. #5
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    Oct 2008

    Re: Najib: Kelantan oil royalty - RM20m as compassionate fund in March

    Hypocrisy of the highest order.

    Mustapa: Kelantan to get RM20m as compassionate fund in March

    KOTA BARU, Jan 27 — The federal government has decided to give Kelantan RM20 million as compassionate fund, due under an oil and gas production arrangement, in March, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said.

    He said the decision was made after discussions with the national oil corporation Petronas recently.

    “It involves revenue from oil and gas production in the South Earth Platform, Block PM301, close to Kelantan waters. The RM20 million is five per cent of the total revenue from the block since May 2008,” he told reporters after opening a forum on the compassionate fund here last night. More than 5,000 people attended the forum.

    Mustapa, who is also chairman of the Kelantan Umno liaison committee, said the Kelantan government’s claim for RM11 billion in oil royalty was extreme as the oil production was not that high.

    “We wish to clarify that oil production at Block PM302, revenue from which is also being claimed, is jointly shared with Thailand under the Malaysia-Thailand joint development area since 1979.

    “The revenue shared is only RM800 million, and it cannot be shared with Kelantan because the oil production is in an overlapping area between the two countries,” he said.

    He also said the federal government could not hand over the RM20 million to be administered by the state government for fear the compassionate fund would be misused.

    He said the money would be utilised to benefit the people of Kelantan in terms of education, eradication of poverty and other needs deemed necessary by a special committee.

    “We are disappointed that (Mentri Besar Datuk) Nik (Abdul) Aziz (Nik Mat) has rejected our invitation for him to join the committee,” he said.

    Mustapa said Umno had to explain the oil royalty issue so that the people knew that it was raised by the Kelantan government to divert attention away from the Kelantan Mentri Besar Incorporated issue and the Bazaar Tok Guru issue.

    “The issue was raised purely for the sake of politics and we know that it will be used as a weapon in the next general election.

    Tomorrow, the state government and a non-governmental organisation on the oil royalty claim are scheduled to organise a gathering at the Sultan Muhammad IV Stadium.

    It is expected to be attended also by Nik Aziz and former Petronas chairman Tengku Razaleigh Hamzah.

    Mustapa challenged Kelantan to bring its oil royalty claim to court if it felt it was in the right, but said the state government was afraid to do so because it knew it was not in the right.

    Meanwhile, Pasir Mas Member of Parliament Datuk Ibrahim Ali said he was prepared to bring the matter to court, just to prove that PAS was afraid to do so because the matter was raised purely for the sake of politics. — Bernama

  6. #6
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    Oct 2008

    Re: Najib: Kelantan oil royalty transformed to 'goodwill payment'

    Bottom line: Can you trust UMNO? Their behaviour smacks of colonialism, like that of a conquering power and Kelantan is merely a vassal state to be milked. Same with Sabah and Sarawak.

    Kelantan strikes back over KL’s oil ads
    By Debra Chong

    KUALA LUMPUR, Feb 25 — Fed-up with the federal government’s attempts to dodge out of paying oil royalties, the Kelantan state government is fighting fire with fire.

    Earlier this week, Kelantan sent out copies of its eight-point stand of its claims for payments for oil produced off its coast to several Malay-language newspapers to counter the federal government’s eight arguments.

    According to lawyer Tommy Thomas, a member of a team of lawyers engaged to act for the state government, the papers have yet to publish the state’s version.

    The federal government had over the weekend taken out pages in Berita Minggu, Mingguan Malaysia and Sinar Harian listing eight reasons to deny Kelantan its claim.

    “We disagree with the answers given in the recent advertisement made on behalf of the federal government,” Thomas said, and provided a copy of the state’s basis for its oil claims for contrast. TheMalaysiaInsider....

  7. #7
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    Oct 2008

    Re: Najib: Kelantan oil royalty - Revisit Terengganu experience in 2001

    It took nine years for them to finally wake up

    Wednesday, 24 February 2010 Super Admin

    Today, there is so much brouhaha about the Oil Royalty (illegally renamed ‘Wang Ehsan’) issue. Even Tengku Razaleigh Hamzah has awoken and it looks like a hornets’ nest has just been stirred. On 18 February 2001, I wrote the article below called Fight Fire With Fire. On 11 April 2001, I was detained under the Internal Security Act on grounds that I am threat to national security. I was earlier also arrested under the Sedition Act on Hari Raya Haji and the police raided my house and confiscated my computer. And this article was one of those ‘grounds’ they used against me to justify my arrest and subsequent detention.


    Raja Petra Kamarudin

    Fight Fire With Fire (Raja Petra Kamarudin, 18 February 2001)

    Two weeks ago I met Ustaz Haji Abdul Hadi Awang, the Chief Minister of Terengganu, to interview him on behalf of Berita keADILan. The question I asked was how would the state fare without their RM800 million a year oil royalty and what does the state intend to do about the matter?

    Three courses of action

    Ustaz Hadi laid out three courses of action the state is taking. First is administrative, the second political, and the third legal.

    On administrative, the state has already sent a high-powered delegation to meet the higher-ups in Petronas. On political, the State would go round explaining the issue to NGOs and political parties. Finally, on legal, the state has set up a technical committee to explore the possibility of taking Petronas to court.

    With all due respect to Ustaz Hadi who I have personally known for more than 20 years (30 years now) and whom I have extremely high regards for, I feel all three avenues are a dead end and will come to naught in the end.

    First of all, on the administrative route. So they have met Petronas and Petronas has not denied that a legal contract does exist between the national oil company and Terengganu. But what good does it do? Terengganu will still not get its money. It is not Petronas that refuses to pay Terengganu its money but Mahathir.

    Mahathir is the real culprit - not Petronas

    Under the Petroleum Development Act (144) 1974 passed by Parliament in 1974, the Prime Minister has absolute and final authority over Petronas. That’s it, Mahathir decides and dictates what Petronas does and there’s no two ways about it. And unless Terengganu talks to Mahathir personally Petronas can do absolutely nothing to help Terengganu.

    More details on this Act have been included in this feature as a footnote below.

    Should Terengganu then talk to Mahathir?

    No way! Mahathir hates PAS from the bottom of his heart and he would rather die than give in to PAS.

    Terengganu’s weak political action

    So, over to option number two -- political. The State is going round explaining to the people the real issue behind Terengganu’s oil royalty being withdrawn. But the people already know the facts. Why try to convert the already converted? The people do not want talk. They want action.

    Can Terengganu really get a fair trial?

    Finally, legal action. Does Terengganu really believe it can get a fair trial in a Malaysian court? If it does then pigs can fly. Trials and court cases in Malaysia are rigged and you can bet your last oil Dollar that the Terengganu versus Petronas court case will be heavily rigged.

    Anyway, the trial will go on for ten years or more. By then Terengganu will be so broke PAS will beg UMNO to take the State off its hands (it did in 2004). UMNO can afford to wait ten years (it only had to wait three years). Can PAS? With no money in the pocket, time creeps by ever so slowly and ten years can feel like a life sentence.

    No, all the above will not work. Let us not be idealistic but be realistic. Let us analyse what is really going on.

    First of all, it is Mahathir and not Petronas that’s the culprit. Secondly, it is a political decision taken for political considerations and the action too is political. Lastly, stop talking and start acting.

    Taking all this into consideration, immediate action is required and the action must be political and not legal or administrative.

    And the type of political action to take?

    Terengganu is too paranoid about being seen as “aggressive”

    Before I continue I must add that Terengganu State is too paranoid about its image and is reluctant to be seen as doing anything “illegal” or “ganas”. That attitude should change. Mahathir did not care about his image or whether he is seen as ganas when he withdrew Terengganu’s oil royalty. In fact, Mahathir said no such agreement exists. If this is not ganas I don’t know what is.

    Fight fire with fire

    Terengganu must fight fire with fire. Terengganu must realise it is fighting for survival and its (political) life is at stake. Terengganu must “take to the streets”.

    First, all East Coast rakyat should be told to boycott Petronas petrol stations. So the petrol station owners go bankrupt, but that’s the price of “war”. How can the petrol station owners continue to support Petronas when it is killing off Terengganu State anyway? Maybe they deserve to go bankrupt.

    Blockades should be set up at the Petronas refinery in Kertih so that the tankers cannot get in or out. “Guards” should be placed at all Petronas petrol stations to “discourage” people from patronising the place.

    This sounds confrontational and it is. Terengganu must confront Petronas. In fact, it should declare war on Petronas and whoever else cooperates with Petronas. Whether they are car owners or petrol station owners they should be treated like the enemy if they cooperate with Petronas.

    Terengganu stands to lose about RM4 billion by the next general election. This is no paltry sum and the state should fight tooth and nail to get the money back. The state should also not be afraid to spend a bit of money in employing guards to enforce the statewide boycott on Petronas stations and the blockade on the oil refinery.

    Petronas must be made to lose money for the money Terengganu State is losing - an eye for an eye and a tooth for a tooth.

    Promote it at a National issue and not just a State issue

    Terengganu State must see its fight with Petronas as a National battle. The state must remember that Petronas has earned a total of about RM300 billion from Terengganu since it started its operation around 25 years ago (double that now). However, it can account for only about 20% of that money.

    Since under the Petroleum Development Act 1974 it says Petronas is only answerable to the Prime Minister and takes direction from the Prime Minister only, this means only the Prime Minister, and no one else, knows what happened to all that money.

    The opposition Parliamentarians have been trying for years to get Petronas to reveal its accounts but it refuses to do so, saying that they need only show the accounts to the Prime Minister and to no one else. Not even Parliament has the power to direct Petronas – and to think Petronas was set up through Act of Parliament.

    Petronas needs to be “stripped naked” so that Malaysians can see where all their money has gone. We are talking about hundreds of billions here. Malaysians need to know where Mahathir has stashed all this money.

    Rally “People’s Power”

    The State should not confine its fight to a handful of people. Get the rakyat involved. The rakyat are waiting for directions from the top.

    On 25 November 2000, Dr Hatta Ramli, the political secretary to Dato Ustaz Fadzil Noor, the President of PAS, handed a Memorandum to Tun Daim protesting the withdrawal of the oil royalty. A crowd of at least 5,000 people escorted him there. Dr Hatta then announced that if the Federal government ignores this Memorandum, he would get one million people to take to the streets.

    Well, the government has ignored the Memorandum. Where are the one million people? Dr Hatta should carry through his promise – or was it just a threat? He should mobilise these one million people - and I know he can if he puts his mind to it. In fact, if you can get one million people onto the streets, not only would Petronas buckle but Mahathir himself will also fall. This will be Malaysia’s equivalent of People’s Power.

    Form a human barricade

    There are about 3 million people in the East Coast. You don’t need all these three million but a mere percentage of them. Call the people out. Get them onto the streets. And ask them to form a human barricade and block all Petronas installations in the East Coast.

    People will not be able to get in or out. All economic activities will grind to a halt. Even Mahathir’s police will be powerless. Petronas will have to either reinstate Terengganu’s oil royalty or close down.

    If Terengganu cannot get the money that is rightfully theirs then let no one else get it either.


    The Petroleum Development Act (Act 144) 1974

    This Act covers the exploration and exploitation of petroleum, whether onshore or offshore, by a corporation in which will be vested the entire ownership in, and the exclusive rights, powers, liberties, and privileges in respect of the said petroleum, and to control the carrying on of downstream activities and development relating to petroleum and its products.

    Important clauses in this Act are:

    1. A Corporation would be set up for this purpose under the Companies Act to be called Petroleum Nasional Berhad or PETRONAS for short.

    2. The Corporation shall be subject to the control and direction of the Prime Minister who may, from time to time, issue such direction as he may deem fit.

    3. The direction so issued by the Prime Minister shall be binding on the Corporation.

    4. In return for the ownership and rights, powers, liberties and privileges vested in it by virtue of this Act, the Corporation shall make to the government of the Federation and the government of any relevant State such cash payments as may be agreed between the parties concerned. Malaysiatoday....

  8. #8
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    Oct 2008
    Terengganu oil royalty shows Putrajaya hypocrisy, says Kelantan

    By Shannon Teoh
    May 11, 2011

    Husam said Kelantan was being denied the payments despite signing the same deal as Terengganu. — file pic

    KUALA LUMPUR, May 11 — Kelantan cried foul today over oil royalty payments made to Terengganu, claiming the federal government was practising double standards by denying the PAS-held state of oil royalty since 2005.

    State executive councillor Datuk Husam Musa said today that the RM938 million paid to Terengganu proved that Barisan Nasional (BN) was “neglecting Kelantan due to political factors.”

    Terengganu Mentri Besar Datuk Seri Ahmad Said reportedly told the state assembly yesterday that the amount would be paid by June this year.

    He said that RM670 million had been paid up to March this year, with RM150 million to be paid this week and another RM118 next month.

    Ahmad added that the royalty was based on the five per cent provided in the 1975 agreement between state and federal governments.

    “Both Kelantan and Terengganu signed the same agreement 36 years ago. The legal basis is the same,” said Husam, who also chairs Kelantan’s special committee for petroleum royalty.

    Kelantan claims that Petronas owes the state RM800 million per annum for oil obtained from the Kelantan-Thailand offshore area since 2005.

    Kelantan filed a suit last year in the High Court here against the national oil company for breaching the Petroleum Development Act (PDA) 1974 by failing to pay the state oil royalties.

    Petronas and Putrajaya have argued that Kelantan was not entitled to oil royalties, preferring instead to offer only a token goodwill payment.

    The PDA states that in return for vesting of petroleum ownership in the company, Petronas would pay cash payments to the federal and state governments where petroleum was found.

    On May 9, 1975, Petronas had entered into an agreement with Kelantan where it agreed to make cash payments yearly amounting to the equivalent of five per cent of the value of petroleum obtained onshore and offshore Kelantan.

    In consideration of Petronas’s payments, it was granted exclusive rights and privileges of obtaining petroleum in the state under the Kelantan Grant.

    Husam today called for Prime Minister Datuk Seri Najib Razak to ensure the royalty payment issue to Kelantan is settled to ensure the rights of Kelantan citizens are returned.

  9. #9
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    Oct 2008

    Ku Li: Solve K'tan oil royalty issue before GE

    Jul 30th, 2012

    Influential Umno veteran Tengku Razaleigh Hamzah has urged the BN government to resolve the demand of the Kelantan state government for oil royalty before the next general election to garner the people's support.

    According to a Sinar Harian report which cited Astro Awani, the Gua MusangMP revealed that a few Kelantan Umno leaders had sought his views on how to strengthen the party in the state which has been governed by PAS since 1990.

    He suggested to them that the issue of Kelantan oil royalty is one that Umno should resolve in order to recapture the state.

    "This has been stipulated by the Petroleum Development Act which was enacted in 1974 by Abdul Razak Hussein (left) who was the then prime minister and Umno president," he said.

    However Razaleigh, who is also the founding chairperson of Petronas, dismissed criticism that he is siding with the opposition on this issue.

    "I say it not because I support the opposition, no. It is just to clarify what is stipulated in the Petroleum Development Act.

    "If it could be accepted by Umno at that time when Razak was the (Umno) president, and I was the vice-president, why Umno does not accept it now. It is not reasonable," he added.

    The Kelantan state government filed a legal suit against the federal government in August 2010. The trial is still ongoing.

    In another development, Sin Chew Daily reported that MCA president Dr Chua Soi Lek said the 13th general election will not be held this September. However he did not elaborate.

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