Petronas royalty rates to stay

  • Nation
  • Wednesday, 14 May 2008

THE Government has no plans to review the royalty payment by Petronas to the states, Minister in the Prime Minister’s Department Senator Datuk Amirsham A. Aziz said.

He said Petronas had paid RM26.83bil in oil royalties to the Federal Government and three states (Terengganu, Sabah and Sarawak) from the financial year 2004 to 2007.

He added that the royalty payments to the Federal Government were RM13.4bil, Terengganu (RM7.3bil), Sabah (RM1.2bil) and Sarawak (RM4.8bil).

“The royalty payments to these states are based on a set contract formula of 5% or half of the royalties paid to the Federal Government.

“The royalties paid to each of these states are based on their production values.

“The Government has no plans to re-examine the royalty contributions paid by Petronas to the states,” he told Opposition Leader Datin Seri Dr Wan Azizah Ismail (PKR – Permatang Pauh).

Asked by Alexander Nanta Linggi (BN – Kapit) whether the Government would agree to increase the royalty payments to Sarawak to 20%, Amirsham said there was no plan to re-examine the rates.

On another matter, Amirsham said Malaysia was expected to become a net energy importer of oil and gas by 2014.

Based on the current oil extraction methods, he added, the crude oil and oil condensates were expected to last for 22 years, while gas reserves would last for 39 years.

He also said that the royalty payments to the states amounted to 10% of the production-sharing capacity amount.

Amirsham said 241.3 million barrels of crude oil and oil condensates were extracted from Terengganu, Sabah and Sarawak for this financial year (until March 31), while two billion cubic feet of gas were extracted from the three states during the same period.