Tuesday, June 24, 2008

How much is Anwar's 20% fuel royalty?

Dear Uncle Yong,

I learnt of your discussion with Anwar in Hong Kong where you must have been attracted with his offer of 20% in oil/gas royalty to Sabah.

Well, certainly your call to the PM to accede to some of your demands, including the 20% royalty, and your intention to move a motion of no confidence in his leadership have Malaysiakini writing on Yong becomes folk hero in Sabah.

Congratulations. Though we already have The Hero of Reformasi or rather more correctly, Deformasi, we can always accommodate another hero.

Meanwhile, in Asia Sentinel, Joe Fernandez, an educationist, former newspaper editor and ex-civil servant in Malaysia wrote about Anwar’s False Promise on Fuel Prices.

Fernandez started off by lambasting Anwar’s attempt to reintroduce fuel subsidies in Malaysia as grossly irresponsible.

Of course Anwar knows, you know, I know and almost everyone knows that if Anwar becomes PM, it's most likely he won’t do it because it’s just a populist promise, merely saying things that people wants to hear. He will undoubtedly come up with another excuse, blaming everyone under the sun except himself.

On second thoughts, Anwar might just do it (reduce the fuel price) as we know he was a lousy Finance Minister anyway, as told to us by in this well researched article by the Jebat Must Die blogsite.

Mind you there is a third possibility. Malaysiakini columnists Ong Kian Ming and Oon Yeoh said that it could be possible that Anwar may, say, reduce the fuel price from the current RM2.70 (rather than the price of RM1.92 when he made his promise) to, say, RM2.50 or RM2.20 and then claim he has fulfilled his promise – well …….. ;-) ........

Anyway, back to Fernandez of Asia Sentinel who continued:

This is not the first time that Anwar has grossly misled the public in making pledges by referring to his "credentials" as a former Finance Minister for so many years.


In the run-up to the March 8 general elections and in its aftermath, Anwar promised the oil-producing states of Terengganu, Sabah and Sarawak that he would increase up their current royalty of 5 percent to 20 percent, and at one stage even 40 per cent, if and when his Opposition Alliance was to seize the reins of power from …....

How Anwar would manage the 20 percent pledge is a mystery. ……..


In Malaysia, under the Production Sharing Contracts, 70 percent of oil barrels are recovered as cost oil by the contractor concerned. The remainder 30 percent is shared equally between the oil contractor and Malaysia, with each party getting 15 percent.

Malaysia's 15 percent is split 2:1 with 10 percent going to the federal government, and held by national oil corporation Petronas, and five percent paid by Petronas to the oil states concerned on behalf of the federal government.

Hence, from where does Anwar get the magical royalty of 20 per cent to the oil states?

Well Uncle Yong, this is not the first time these set of figures have been raised, but then, each time an anwarista would quickly argue that Anwar meant 20% of what Malaysia would get rather than 20% straight from the Production Sharing Contracts.

Uncle Yong, kaytee is not very smart at maths so I cheated by using a Casio calculator and gasp, gawd, omigosh I came up with the answer that 20% of what Malaysia would get (basically 15% of the Production Sharing Contracts) is only 3%!

3%! Yes man, only 3%!

Now Sabah and Sarawak each is already getting 5% but according to my silly calculations, under the Anwar’s amazing 20% promise, that would turn out to be a far smaller 3%.

Could that be – no, no, no it can’t, surely not from the world’s greatest economist? Definitely must be my mistake!

Yours sincerely,

Kuai Larn Knia

20 comments:

  1. Under the Production Sharing Contract, 65~70 percent of the oil extracted belongs to Malaysia and Petronas, the remaining 30~35 percent goes to the oil contractor to cover it's exploration, production and profit.

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  2. Uncle Yong has the right to not support the Prime Ministar lah... don't so harsh to him first...

    Wait until he jump ship to Anwar...

    Reduce Oil Price and 1.5K Minimum wage were 2 of the prominent "promise" by Datuk Seri Anwar Ibrahim...

    and that sends shiver to my spine... Any impact study before hand?

    Anyway, Korean president promised 747 economy, 7% annual economic growth, 40K yearly income per capita and 7th strongest country in the world in terms of economy... Then also promised to buiild north-south canal...

    All not feasible, North-South Canal kena kutuked by professionals and greens... 100-day popularity poll dropped to 17%... kesian...~~ Coincidentally... the president was a CEO...

    If according to Anwar's promise... either the Nation continues to decay... or the "new government" suffered from foot-in-mouth syndrome...

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  3. I don't think your 70% cost oil information is right though.

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  4. Its look to me that the people have not much choice, either the demon or the devil.

    Cheers

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  5. Sabah people deserve to be poor.
    Cowards do not deserve a better life.

    Just put up your ass and get sodomized.

    truemalaysianpatriot.blogspot.com/2008/06/sabah-people-deserve-to-be-poor.html

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  6. Dr. Sam Petroleus (A Real Economist)11:55 am, June 24, 2008

    Don't be so simplistic.

    The oil sector can be nationalised, and so 100% of revenues could be in national hands, and so 20% could thus in theory be given to Sabah.

    Think out of the box, boy.

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  7. Ktemoc,
    Your reading of the provisions of the Petroleum Development Act 1974
    is faulty. Anyway, the Malaysian government makes far wider uses of Petronas funds than Petrona's strict obligations under the PD Act. Its been used to rescue Bank Bumiputra, rescue MISC, build the Twin Towers, build most of Putrajaya etc. etc.

    The country has earned some 1/2 TRILLION RINGGIT from Petroleum exports since 1974. What happened to the money has never been made public.

    In the context of the overall petroleum "deal" Anwar's 20% return to Sabah is very implementable.
    Unfortunately (hehehehe...) Anwar, of all people, certainly knows better than anyone how the government has misused the petroleum funds.

    You correctly point out he WAS part of the UMNO swamp, but I differ in that, to me, he is not the same man as he was in 1997.

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  8. Your comments on the costs are too simplistic and do not make sense at all.
    If the price per barrel is now USD130, the cost of producing that barrel cannot be 70%xUSD130=USD91.
    If price drops to USD100, then you are saying that cost is USD70. Since when cost is related to revenue that way?
    If that is the case, Proton will never lose money even if it sells its cars at RM10,000 each !
    Please make it bit of research before shooting people down, or is it you are anti-Anwar and pro-Badawi?Dont behave like main stream medias!

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  9. Hi KT , your argument of 70 % of crude oil revenue goes to foreign contractors is fundamentally flaw as we know Petronas also has its own exploration and extracting company.
    Meaning not 100 % of local crude production are done by foreign companies.

    May be you want to be more objective and careful the next time you want to whack Anwar Ibrahim.

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  10. To Kuai Larn Knia,
    Air Itam, Penang

    First, your name sounds funny and means "Strange Testis Boy". Heheheh

    Second, when I get to become DPM of the country, the fuel royalty will go into my swiss bank. Heheheh

    Your Uncle Yong

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  11. hi Kt some of the commentators has pointed out the flaws in the calculation and I would like to add by asking since when has the government of the day follow the rule of law to the exact t?

    most time they just close one word and emphasis another word which coincidentally would support their cause.

    having said that i am perplex why despite all anwar chest thumbing about how he can reduce oil pump price is he so hesitant to shed some light on the mechanics of it?

    afterall he has already got the attention of all Malaysians and possibly the world - so if he has got a good formula to share and SHARE it NOW and IF the government DARE to adopt it and adopt it successfully - man! i think his place as the numero uno of malaysia would be guarantee!

    it is not as if it is a new design to beat the competitor or what - he can announce the plan to the world and challenge the government to review and adopt it. surely there must be enuf economist whiz in malaysia to see if it is a viable formula or not.

    as it is now the rakyat is languishing in price hike, finding it all the more difficult to earn a decent meal while the government is saying vertical price hike is a necessary evil while the BN MP is still drapped in Armani suits and on another Sdr Anwar is promising he can lower the petrol price ONLY if he become PM.

    Can a real people representative please stand up and do the right thing like NOW and not just shooting rhetoric?

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  12. LLA said...

    Hi KT , your argument of 70 % of crude oil revenue goes to foreign contractors is fundamentally flaw as we know Petronas also has its own exploration and extracting company.
    Meaning not 100 % of local crude production are done by foreign companies


    Yes, petronas has its own exploration and extracting company, which is the Petronas Carigali, but they are also considered as contractors, and they take the money back to cover up the cost of the exploration and production or whatever shit you call it, probably you should try doing some research too =)

    BN shouldnt be trusted anymore, they have failed us, but what is more important is to who should you run to in dire times like these? anwar? I DONT THINK SO

    heres an analogy, people who believe in anwar are like dumb blondes who keep falling in love with assholes who talks sweet but after you marry him, they'll start acting like total jackasses, and by then youll start whimpering like a little fool again,

    DUMB BLONDES = YOU
    ASSHOLES = POLITICIANS
    do the maths

    someone here said that anwar has changed, how well do you know this? do you even know anwar personally?

    its so weird seeing all these obsessions running around, has the world gone crazy?

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  13. Ariffin, I agree with Kittykat and I know Anwar personally. Do you? Because your comments on those who believe that he has a better chance to make good equal to dumb blondes. If you do, I'll then challenge to a quiz to determine if we do know him...why is there so much hatred? Mahathir, Anwar, AAB, LKS, Nik Aziz, and all leaders before them have done many good things too...what we want is to make the country better and lets use the right tools and arguments and not be malicious.

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  14. arrifin,

    so you don't trust anwar, eh? that's your choice. Others see him as a better option to the current pirates in control. That's their choice too! Dumb blondes? I doubt you're a blonde, but I've not doubt at all that you're really DUMB!

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  15. There's nothing of positive value about this post. matthias chang in action?

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  16. Kt you are nothing but, 'A great pretender'! Pretending you know all, pretending you are the savior of this bolehland...Not pretending to be a dumb asshole!

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  17. long live mr yong, THANK YOU !!

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  18. Anwar can make promises, make claims, make pledges and say anything he likes but history is full of politicians like him. Once in power, everything will be forgotten and excuses will be made and the ordinary rakyat will be no better off.
    Always remember that he was once part of the BN government. Why didn't he do then what he claims he will do when he is the new PM?

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  19. you know anwar personally? as in, you grew up with him? or are you just an acquaintance? or a good friend who has coffee with him every morning? and oh please tell me the stuffs youve talked about together during your pillow talk sessions that has made you gape in awe every time you think of anwar

    i seriously cannot think one tiny bit of thing that anwar has done when he was the TPM, all i can remember was, that he had a great relationship with the people from the states, particularly Al Gore who, particularly is also a great friend of a jew name Lieberman, hmm

    yes, he has cut all ties with UMNO, but i dont think its that easy for him to cut his ties with all his financial partners overseas, especially when their paying him good money to win the country

    and all this while, what ive been seeing anwar doing is just lip service, same damn thing that the govt is doing, oh right, they all came from the same breed..

    people dont change easily brother, especially racists like anwar, who once flagged his malay rights so high as if he owned the country, and now, its not just the Govt who's playing the racial card, anwar's doing the exact same thing, only that he's on the other side, so a different strategy was taken place there.

    i know you want change, i hate the govt too, but like i said, dumb blondes will always make the same mistake over and over again, and this time around the asshole is anwar, want to know why? cause he's a politician, a slithering stinking politician

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  20. Ariffin, are you a bigot, I hope not. Jews are human beings too. Maybe your memory is selective, perhaps you don't have the ability to see beyond your paradigm. Maybe you don't change, because people do change...they change with new knowledge, new experiences and new surroundings. I don't know about you, but I know I have changed and i pray to god to give me the strength to change for the better.
    I wither what you do daily! All the best to you and I sincerely pray that you do not conduct your daily duties with such malice as the words you use here. Everyone has their strengths and weaknesses, its the collective strength that we need to make our country a better place for our children.

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