Shafie: 20pc oil royalty for Sabah won’t bankrupt Petronas

Julia Chan
Shafie said he had met the national petroleum company and insisted on the new terms. — Bernama pic

KOTA KINABALU, Aug 21 — In his 100th day as Sabah chief minister, Datuk Seri Shafie Apdal promised Sabahans that the state government will demand a 20 per cent oil royalty from Petronas based on gross production, and not profit.

Shafie, who outlined this as among the state’s reforms, said he had met the national petroleum company and insisted on the new terms, while declaring that they “would not go bankrupt” from paying out an increased royalty rate.

“We were clear. I spelt it out to them. In 2013, the federal government got RM32 billion in dividends from Petronas. We have three oil-producing states in the country. I think even if they give out RM6 to 7 billion they won’t go bankrupt,” he said.

Shafie said Sabah was the biggest producer among the three — Sarawak and Terengganu being the other two — accounting for some 50 per cent of the country’s oil and gas output.

“Fifty per cent of the country’s production comes from us. Of course, we don’t mind sharing. But the federal government gets paid out three times, from the royalty, dividends from Petronas, and then from the tax,” he said.

Shafie said he had already met Petronas president Datuk Ahmad Nizam Salleh and would meet with Prime Minister Tun Dr Mahathir Mohamad and Economic Affairs Minister Datuk Seri Mohamed Azmin Ali on the matter.

Shafie said that both Pakatan Harapan (PH) and Parti Warisan Sabah had made an electoral promise to increase the oil royalty from 5 per cent to 20 per cent based on gross production and wanted to have it done as soon as possible.

“However, as much as we want this to be realised as soon as possible, it’s not an easy task — the formula has been there for 50 years,” he said.

Shafie said Sabah was a big state and needed more funds to develop industries that would in turn provide jobs for its people.

In line with that, he said it would continue to pursue the 40 per cent return of revenue from the federal government that was provided for under the Constitution but that has not been paid out.

“Since 1973, we have been getting about RM23 million a year. We never complained but we want what is ours,” he said.

On his progress in the 100 days since taking office, Shafie said the Warisan-led government had put in place people-centric development programmes that focused on economic development and wellbeing.

Shafie highlighted the setting up of the state Education and Innovation, and Health and Wellbeing Ministries, the abolishment of the controversial native communal titles and the restructuring of several government-linked companies, including the logging industry, as among the bigger moves he has made so far.

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