STAR: PETRONAS MISSES POINT – ITS OWNERSHIP AND RESPONSIBILITY

“Petronas is irresponsible and misses the point when it acted as if it is the sole custodian of Malaysia’s oil and gas resources.” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief, in response to Petronas’ statement that Petronas cannot afford to increase the cash payment to 20% to the oil-producing States as offered by Pakatan Rakyat.

The federal government is also irresponsible in using Petronas as its mouth-piece to reject the claims of the oil-producing states for increases in the cash payment from the current 5%.

The federal government and Petronas has totally ignored the fact that the oil and gas resources belonged to the states, Kelantan, Terengganu, Sabah and Sarawak, in the first place.  It did not belong to the federal government and definitely not Petronas.

Vesting 100% Ownership to Petronas and Giving Back 5% Is Wrong

The late Tun Abdul Razak had no right to vest and give away Sabah and Sarawak’s oil and gas resources to Petronas in 1975 when he signed the Vesting Order as the then Prime Minister of Malaysia.   The oil and gas did not belong to Malaysia but to Sabah and Sarawak and in the latter was already producing oil on its own in arrangements with its overseas partners.

Therefore, taking away 100% of its oil and gas and giving back a meagre 5% to Sabah and Sarawak is wrong and unacceptable.

Increasing 5% Cash Payment Should Not Be The Issue

From Sabah and Sarawak’s point of view, we should not be trapped into discussing the increase of the 5% cash payment.   In fact, many of our Sabah leaders, including the Chief Minister, are still confused with the 5% cash payment and royalties.   It is not royaltyas in the 1976 Oil Agreement, the State government was pressured to reject or waive its right to collect royalty.

The real issue now is not the amount of cash payment but the validity of Tun Abdul Razak’s Vesting Order to Petronas as the oil and gas belonged to Sabah and Sarawak.  Such a vesting to Petronas has to be unconstitutional and invalid?

Therefore, Petronas and the federal government, and Pakatan Rakyat as the alternative front, and their leaders should be talking, firstly about restoring and returning the ownership of the oil rights to Sabah and Sarawak and then, secondly re-negotiate for the States to contribute a portion of the oil revenue to the federal government/Petronas.

The current Prime Minister should atone for the injustices caused by his late father in 1975 against the people of Sabah and Sarawak and revoke the 1975 Vesting Order.

The Prime Minister should respond to this specifically and not beat around the bush or get others to do his talking.  He need to show he is the Prime Minister for all Malaysians including Sabahans and Sarawakians and have their interests at heart and that he is in charge.

For example, Umno/BN would now need to raise the oil revenue for Sabah and Sarawak from 5% to 20% and this additional income, if put to good and proper use, will definitely contribute to the well-being of Sabah, Sarawak and their people.   And if Umno/BN does not increase the oil revenue to 20%, BN component parties in Sabah and Sarawak should re-assess their position and pull out from BN for the sake of Sabah and Sarawak and their future.

Petronas Should Be Responsible Not Run Away from Responsibilities

The role, accountability, transparency and responsibility of Petronas has long been disputed.   It is now  time for Petronas and the federal government to make Petronas a publicly accountable and responsible corporation.

Petronas should not be run and managed like one’s father’s company.

Except perhaps for its Chief Executive, its Adviser and the Prime Minister, no one else in Malaysia is fully informed of the going-ons in Petronas.  Now, information is provided selectively and on a need to know basis.

In this modern technology era, Petronas should make full disclosures of its production, sales volume, sales values, production contracts, as a matter of fact, the full details and works, not just for Sabah but all the oil-producing states so that the people who are the ultimate owners of Petronas are kept in the know and not in the dark as being done now.

Petronas Should be Owned at least 50% by Oil States

From available information, it appears that as at 30 June 2012, the total assets of Petronas stood at RM493.3 billion.  Presumably, these assets included the once tallest in the world Petronas Twin Towers, KL Suria, KLCC Convention Centre, MISC Berhad with its fleet of LPG tankers and vessels, Putrajaya, the F-1 race track in Sepang amongst others. Internationally, Petronas has now grown into global corporation with operations worldwide.

It has to be remembered that Petronas started from humble beginnings in the 1970s and with 95% of the oil revenues of the oil-producing states. It is believed that Sabah and Sarawak contribute more than 75% of Malaysia’s oil and gas production.

If the founders of Petronas in the 1970s had foreseen the potential and future of Petronas, they should have realized that the real stakeholders of Petronas are not the federal government but the oil-producing states themselves and the people of these states.The founders should have provided for the shareholding of Petronas to be owned at least 50% stake held by the oil-producing states.

Petronas would not be what it is today, a Fortune 500 corporation, if not for the oil and gas from Sabah, Sarawak, Terengganu and Kelantan.

In the true spirit of a true federation, the time has arrived for the federal government to restructure Petronas and allow at least a 50% stake to be held by the oil-producing states.

In criss-crossing Malaysia, the Prime Minister has been trumpeting that he is the Prime Minister for all Malaysians with his 1-Malaysia slogan.   This boast has been proudly supported by all Barisan Nasional leaders, often if not all the time, to be in the good books of the Prime Minister.

The additional revenues derived by the oil-producing states will contribute towards a higher development tempo and pace for the oil-producing states and alleviate poverty in these states which are currently amongst the poorest in Malaysia.  Development will then be more equitable and balanced and bring these states on par with the more developed states and provide an additional impetus to propel  Malaysia to developed nation status.

In conclusion, at the root of the oil and gas issue, the time has come for the federal government to return the oil and gas ownership rights to the rightful owners, Sabah, Sarawak, Terengganu and Kelantan, and for Petronas to assume the mantle of responsibility and be accountable and transparent for its operations and financial reporting.

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About dusunbukit

You've got your truth, I've got my truth. We can't be both wrong. The real challenge is to discern the difference. Pardon me if I offend you, but I'm going to put my words bluntly. So, lets rumble..
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