Oil royalty

Oil royalty: SAPP not giving up Kota Kinabalu: The Sabah Progressive Party (SAPP) is not giving up its struggle for more oil royalty payment for Sabah even though the State Government stated it is not pursuing the matter since the Petroleum Development Agreement is not revisable.  "This is not the end of the story, we will continue to fight for it," said President Datuk Seri Yong Teck Lee commenting on Chief Minister Datuk Seri Musa Aman's explanation during the recent Budget sitting that there is no provision in the agreement to review the five per cent oil royalty.  SAPP Luyang Assemblywoman, Melanie Chia and Sepanggar MP Datuk Eric Majimbun, had both raised the issue at the State Assembly and Parliament, respectively.  "Even the country's Constitution can be amended (so) why can't it be the same for the Petroleum Development Agreement?," said Yong, adding that even if it is stated that the agreement is not revisable, it is not final so long as both the Federal and State governments mutually agree to review.  "We will not be surprised if Kuala Lumpur declines to review because they are taking our resources but it is a surprise that our State Government is also reluctant to call for the review," he said.  Speaking to reporters after the soft opening of the SAPP Putatan Maju Centre near here, Saturday, Yong asked if it was wrong for Sabah and Sarawak to request for a revision on such a lop-sided agreement.  According to him, Parti Keadilan Rakyat de-facto leader, Datuk Seri Anwar Ibrahim also shared similar sentiment on this issue with SAPP.  "This morning (Saturday) we (SAPP leaders) had breakfast with him, to get to know each other and discuss several issues like the economic situation and the review of the petroleum agreement.  "Anwar's stand and (that of the) SAPP is the same on this issue," he said.  Asked if there was any official invitation from Pakatan Rakyat for SAPP to join them, he said there was none.  "But the components in the Pakatan Rakyat understand our position," he said, adding that SAPP is also not answerable to Pakatan Rakyat, especially in the context of its eight-point agenda, one of which is State autonomy.  "The question of whether Pakatan Rakyat agrees with SAPP or not, is not the issue because that is what we call State autonomy.  "We don't have to get permission from anyone outside Sabah to get autonomy," he said, when asked if he had spoken to Anwar about State autonomy.  Nonetheless, SAPP would be constructive and innovative in its relationship with PKR without compromising its autonomy, he said.  "Whether we will be opposing or supporting each other (in the election) our basis is in the eight-point agenda and one of them is State autonomy. So we cannot do anything that compromises our autonomy."  Earlier, Yong said the opening of the SAPP Putatan Centre at the former Sabah Barisan Nasional (BN) headquarters in Putatan Square is a symbolic start for SAPP's struggle.  "I feel proud that SAPP now has gained a foothold in Putatan. As the first step to fight for the rights of Sabah we take over the State BN's office. Our re-branding process that started in October is beginning to show results.  "This is just the beginning (and) there are more great things to come," he said.  He added that so far the party had lost less than 200 members, including one in Tanjung Papat when Datuk Raymond Tan submitted his official resignation letter, but in the past few weeks SAPP had gained more than 1,200 new members.  He also disclosed that SAPP had approved the membership of academician and columnist, Haji Amde Sidek, who is also in the party's think-tank board.  Yong also commended the new members in Putatan led by Dullie Haji Marie, the former Political Secretary to then Minister in the Prime Minister's Department Tan Sri Pandikar Amin Mulia, for joining the party.  "It is very rare that a ruling coalition party component will leave the government of the day and fight for the opposition. It is even rarer that new members join this party knowing very well that the next elections is still a long way to go," he said.  Later, Yong together with SAPP Supreme Council members witnessed the planting of the SAPP flag at the centre by party adviser, Datuk Haji Murshidi Nambi. He also received 612 membership applications from the 10 SAPP branches in Putatan. (As reported in Daily Express on Nov 23, 2008) Questions on Blocks L & M not fully answered Kuala Lumpur, July 1, 2010: Member of Parliament for Tawau, Datuk Chua Soon Bui, said the federal government did not give a satisfactory answer on why the 3 million acres of oil block L and M were ceded to Brunei. The federal government evaded her real question by quoting 'national interests', fairness to neighbours, boundary sharing, socio-economic and cultural ties being the factors for ceding of the oil blocks. The federal government added that Malaysia's action at the time was to neutralize the tense situation that arose as a result of the oil and gas exploration. Chua questioned why since it was the issue on the oil and gas exploration rights that created the tense situation, why didn't Malaysia negotiate for joint exploration and extraction rights rather than having to give up the sovereignty rights on the 3 million acres of marine territory? "In any eventuality, why didn't Malaysia refer the matter to the International Court of Justice (ICJ) in resolving such an important issue of national interest? "No other rational reasoning would be good enough for the people especially when the nation is so proud of the winning of the sovereignty rights of Pulau Ligitan and Pulau Sipadan on 17/12/2002 in ICJ as recorded in the Malaysia Maritime Realm Atlas. "There is no mention that one coastal nation must surrender its sovereign rights to another neighbouring nation as what the federal minister has claimed that their decision was based on the United Convention on Law of the Sea 1982 (UNCLOS 1982) on the continental shelf. "Why was such joint submission not done when Malaysia had the experience of such joint submission with Vietnam on 27 August 2009 since the UN Commission on the Limits of the Continental Shelf, under Article 76 of UNCLOS 1982, which has the right to decide on the maritime territory of the disputed member states of Malaysia-Brunei?" Chua asked. "If there was any earlier dispute, why wasn't it indicated in the Malaysia Maritime Realm Atlas and why were there reports which showed that blocks L and M belonged to Malaysia until given away on 16/3/ 2009? more.....on adjournment speech by Datuk Chua Soon Bui (Tawau) in Parliament (Mesyuarat Kedua, Penggal Ketiga, Parlimen Kedua Belas): "Malaysians especially Sabahans are confused, questioning and would like to know the status of the 3 million acres oil and gas rich block L and M after statements made by ministers failed to shed lights on the recent revelation by our Ex-Prime Minister, Tun Dr. Mahathir Mohamed that Malaysia's rights on the block L and M oil fields were given to Brunei, causing a loss of RM320 billions to Malaysia in Oil and Gas in an area equivalent to the combined size of states of Perlis, Penang, Melaka and Selangor. The people of Malaysia especially those in Sabah have the right to know the reason why the Federal Government made the decision in March 2009 on the ceding of 3 million acres of Sabah's maritime territory of block L and M to Brunei.  Although many official statements have been released that Block L and M were not part of Malaysia, why then Murphy Oil Sabah Co. L:td.(a subsidiary company of Murphy Oil Corporation) announced on 16/1/2003 that it has been awarded Sharing Contracts covering Block L and M offshore Malaysia. Murphy Oil has 60% interest in Block L and 70% in Block M with Petronas Carigali Sdn. Bhd. holding the remaining 40% and 30% respectively, each block covering 1.5 million acres making up a total 3 million acres. The awarding authority was Petroleum Nasional Bhd. (PETRONAS). Why was there no dispute or mention of Brunei's interests at the time of the award? If the blocks are not part of Malaysia, the well established Murphy Oil Corporation would not have set up a Sabah based Murphy Oil Sabah to share the contract with Petronas Carigali Sdn Bhd.  Most importantly, why was Petronas be the awarding authority if these blocks were not part of Malaysia? The great awakening only came on 22nd April 2010 when Murphy Oil Corporation announced that it had been informed by Petronas on 21/4/2010 that following the execution of exchange of letters between Malaysia and Brunei on 16/3/2009 that the offshore exploration areas of block L and M are no longer part of Malaysia, the sharing contracts were thus terminated. The people are questioning the legality and are asking for TRANSPARENCY on what had transpired between 2003, after the award of the contracts and 2009, whether Sabah's maritime territory (north of Labuan) had been re-delineated? Is the move a violation of Article 2 of the Malaysian constitution making it unconstitutional and illegal. Malaysia had referred the Sipadan case to the International Court of Justice and won the case in December 2002. Surely the 3 million acres of Block L and M with oil and gas worth of RM320 billions is much valuable and beneficial to Malaysia as compared to Sipadan. If there was any dispute at all with Brunei, why was the case not referred to International Court of Justice as Malaysia has the expertise on International law on territorial disputes? The people of Sabah is surprised that government went all out for the Batu Putih and spent millions to fight for territorial claim, but did not raise a finger to fight for the oil and gas rich blocks. It is not just the loss of valuable oil and gas productions, but it is also the loss of Malaysia territorial waters for transportation, the marine lives and food resources for the interests of all Malaysians especially those in Sabah and Labuan. It is therefore with sincere intention that I propose to the Prime Minister Department to call for a "White Paper" to clarify all the people's doubts and to ensure that the rights and interests of the people are always protected." Murky oil blocks deal could cost Sabah billions of ringgit By Charlie Rudai KOTA KINABALU: Sabah should have earned at least US$5 billion (RM16 billion) from the production of oil from Blocks L and M ceded to Brunei, based on its agreement with Petronas, said former chief minister Harris Salleh. The veteran politician, however, said that the state may no longer have the right to demand the amount since both blocks have been ceded to Brunei. "To my knowledge, Murphy Sabah Co Ltd was awarded the two blocks in 2003 worth more than US$100 billion in oil revenue and Sabah is entitled to 5%. "Now that the blocks have been ceded and Petronas has the right to jointly develop the fields with Brunei, is Sabah still entitled to the oil royalty or profits from Petronas?" he asked. He said that if the area was indeed historically and legally part of Brunei, both the state and federal governments should follow procedures to formalise the matter. However, he said that in his opinion if Limbang in Sarawak is historically part of Brunei, then the Malaysian government should find a solution to the matter without further delay. Sabahans have been concerned since the controversial deal was revealed by former prime minister Dr Mahathir Mohamad who said his successor (Abdullah Ahmad Badawi) had relinquished the two blocks to Brunei. Abdullah subsequently confirmed that Blocks L and M now belonged to Brunei but the agreement provided that Malaysia would be allowed to take part in joint development of oil and gas on a commercial basis in the two areas for 40 years. "The financial and operational modalities for giving effect to this arrangement will be further discussed by the two sides. "This means that in so far as the oil and gas resources are concerned, the agreement is not a loss for Malaysia," said Abdullah, who visited Bandar Seri Begawan on March 15 and 16 last year before he stepped down as prime minister two weeks later on April 3. Trade-off for Limbang Mahathir had also said Abdullah had surrendered the two blocks in negotiations with the Sultan of Brunei in exchange for Limbang, which straddles the Sarawak-Brunei border. Blocks L and M are not far from the Sabah coast. Block L alone is projected to produce more than 150,000 to 200,000 barrels per day, which could double Brunei’s oil production. Prior to the agreement ,Murphy Sabah held a 60% stake in Block L and a 70% stake in Block M. According to Mahathir, in return for surrendering the two blocks, Abdullah negotiated with the Sultan of Brunei to get back Limbang. Limbang was, however, reportedly not mentioned by name in the letters of exchange. “No Petronas representatives were present, only foreign office staff and the foreign affairs adviser to the PM,” wrote Mahathir. Mahathir himself was at one time reportedly trying to settle the dispute over Limbang. The Far Eastern Economic Review was sued in 1987 during the Mahathir administration for suggesting that there could be a “possible sale” of Limbang to Brunei.