Federalism gone wrong!

Kelantan claims existence of oil royalty agreement

KUALA KRAI: The Kelantan government claims that there is an agreement to show that the Federal government is liable to pay the state oil royalty if oil and gas are found on or off its shores.


Speaking at a ceramah in Chuchoh Puteri on Tuesday night, Kelantan senior exco member Datuk Husam Musa said the agreement was signed on May 9, 1975 by the then Menteri Besar Datuk Mohd Nasir and Tengku Razaleigh Hamzah, who was Petroliam Nasional chairman.

He said Tun Salleh Abbas had met with Kelantan Menteri Besar Datuk Nik Aziz Nik Mat and him (Husam) on Tuesday to explain the background to the agreement. Tun Salleh was the person responsible in drafting the agreement as he was the Attorney General then.

"In the agreement, the Federal government could take the oil and gas but is liable to pay royalty in cash twice a year in the months of March and September," said Husam, adding that Nik Aziz had written to the Federal government to make a claim of RM1 billion.

The oil and gas activity is located about 150km off Kelantan shores and is jointly developed with Thailand. The area is a disputed by Thailand and Malaysia.

"Sabah's oil is found 210km off its shores and Terengganu's oil and gas activity is 220km away. How can they be entitled to royalty and Kelantan doesn't get any," asked Husam.

The oil royalty issue was first brought up by Husam in 2001 while he was the MP for Kubang Kerian. Just about three weeks ago Machang MP Saifuddin Nasution brought up the issue in Parliament again, as Kelantan was found listed in the Statistics Department's State/District Data Bank as one of the four oil and gas producing states.

The other states on the list are Sabah, Sarawak and Terengganu which receive yearly 5% royalty from the Federal Government. Kelantan is the only state ruled by the opposition PMIP (Pan Malaysia Islamic Party) whereas UMNO (a Malay Nationalist Party) ruled the Federation.

courtesy : the edge