Sunday, July 22, 2018

What nonsensical 'adjustment' - Wan Azizah?

Sun Daily - Gov't to make adjustments to channel oil royalty: Wan Azizah (extracts):

oh dearie me, I forgot my gloves 

TUARAN: The federal government will make adjustments to channel the oil royalty to the petroleum producing states in the country, said Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail.

She said the federal government was very committed to fulfilling its promise to channel the oil royalty as stated in the Pakatan Harapan (PH) manifesto during the 14th General Election (GE14).

"The government will see how best to fulfill that pledge, including taking into account the country's revenue," she told reporters after officiating the 'Sekeluarga Tolak Pornografi (SToP)' or Whole Family Rejects Pornography Seminar at the Institute of Teacher Education, Kent campus, here today

What does the DPM mean "The government will see how best to fulfill that pledge, including taking into account the country's revenue"?

20% royalty means 20% royalty - and not what Mahathir in his licik mamak kira stated as '20% profits'.

Speculating based on oil revenues, 20% royalty on oil and gas could be as much as RM40 to 50 Billion, but 20% profit is likely to be (if Sarawak is lucky) around RM6 to 7 Billion or even less, or if the government kowtim up the production costs etc, zero ringgit for Sarawak.

That's the difference between royalty and profit, or between gross and net income.

The DPM should not talk so much on issues she has no idea about nor will act on, but to let the Finance Minister or the Economics Minister, whoever is in charge (we don't know) states what 20% royalty and 20% profit are.

This has been Pakatan tap-dancing through the tulips, meaning Pakatan has no intention of honouring the 20% royalty pledge made before the election - but then, that's Mahathir's perception of a pre-election manifesto pledge - there are useless to him.


  1. whether it's from royalty or profit sharing it is wise to channel the allocation into a consolidated fund to be used solely for the development of infrastructure, if no conditions are attached we will create more musa aman and pekmoh but no development

  2. Petroleum Development Act 1974. Who was the fler who put it together? That Act was supposed to define ownership of O&G resources in Peninsular and Sabah, Sarawak. What a bad job he did. Who was it? Who? Who? The Nearly Man? His only claim to fame was from 45 years ago and even that he screwed up. Clue: he was also the first boss of Petronas.

  3. O&G is usually under production-sharing basis with the oil majors, eg Shell, ExxonMobil etc. If royalty is based on revenue (ie production) then the majors will require re-negotiation with Petronas and may decide to move out from Malaysia, if the profits are no longer attractive compared to other countries. Petronas will just focus on production outside Malaysia too. So the states demanding share of revenue may be shooting themselves in the foot.

  4. The states entitled to oil royalties payments are currently Sarawak, Sabah, Trengganu and Kelantan.

    Out of these 4 states, 3 (Sarawak, Kelantan, Trengganu) are opposition parties states and only 1 (Sabah) is PH friendly states.

    By right, only 2 states are considered eligible for oil royalties ie. Sarawak and Sabah because they are sovereign states which join Malaya in 1963. The oil royalties previously paid to Trengganu or Kelantan should not be paid since they are part of the Federation of Malaya, but the crafty previous BN Govt. decided on it's own to pay what is called Wang Ehsan for political reasons and not based on any law.

    The Wang Ehsan was paid direct to the Trengganu State Govt. (BN controlled) while the Wang Ehsan for Kelantan (PAS controlled) was channeled to another Federal Agency set up in Kelantan and not to the State Govt. unlike Trengganu.

    The current oil royalties paid to Sabah and Sarawak at 5% of God knows what since it is calculated by Petronas (assumed to be Profit) and should be raised to 20%.

    Methinks TDM did say correctly how oil royalties was calculated since he was with Petronas as it's Advisor until he was replaced.

    So, the issue of paying 20% oil royalties should follow the current calculation based on profit.

    As to the continuation of the oil royalty payments to Kelantan and Trengganu, the question to the new PH Govt. should be "Was it promised specifically to Kelantan and Trengganu in the PH manifesto?" If yes, then it should be honoured.

    By the way, did anybody study PAS manifesto to find out whether if they were to form the Federal Govt., they would also promised such royalty payments?

  5. any writes that mention 20% base on revenue?