Review of oil and gas royalties 'should not be of main concern', says council

  • Nation
  • Saturday, 28 Oct 2017

Malaysia's state oil company Petronas sold last week a December-loading Miri Light cargo at a premium of about $4.50 a barrel to dated Brent, equivalent to about $69 at the latest prices, according to multiple traders that participate in the Asian regional crude market.

KOTA KINABALU: The Federal government has done much to ensure that Sabah benefits from the oil and gas industry, Sabah Oil and Gas Services Council vice chairman Datuk Albert Boyou said.

He said that while a review of the royalties from these resources due to Sabah and three other producing states would do no harm, it should not, however, be of main concern.

In Sabah, he said, Chief Minister Tan Sri Musa Aman had been instrumental in pushing for greater participation in the oil and gas sector through Petronas as well as to provide opportunities for more people in the state.

"Previously this was hardly the case and opportunities in the sector were hard to come by," he said adding this was evident with the development of the many major projects that came since Musa took office in 2003.

In Sabah, the key developments that are in place include Sabah Oil and Gas Industrial Park (SOGIP), which has attracted RM11bil in investments, Sabah Oil and Gas Terminal (SOGT) in Kimanis and the 500km Sabah, Sarawak Gas Pipeline (SSGP) that links Bintulu, Sarawak.

Sabah is also working on getting a 10% stake in Liquefied Natural Gas Sdn Bhd in Bintulu under Petronas.

Albert was commenting on a proposal by Pakatan Harapan in its Alternative 2018 Budget to increase the royalty to 20% for the four oil and gas producing states of Sabah, Sarawak, Terengganu and Kelantan.

He said Musa had taken a strong stand on the importance of getting more locals involved in the projects, from getting a board member appointed in Petronas to securing major developments for the state.

Musa had also put Industrial Development Minister Datuk Seri Raymond Tan Shu Kiah in charge to look specifically into ways and means the oil and gas sector could be further developed, he said.

"All these are major developments which will provide jobs and boost national revenue that could spur greater economic activities for the people instead of just limiting the states to the royalties," he said.

"The number of local companies playing a role have jumped in numbers, servicing and undertaking projects distributed by national oil and gas company Petronas or that of other multi-national companies with interest in the industry Sabah," Albert added.

The SOGT has a capacity of handling 260,000 barrels of oil and 1,250 million standard cubic feet of natural gas per day. All these are supplied from the Kinabalu Non-Associated Gas field southwest of the state via a 120km underwater pipeline.

There is also the Sabah Ammonia and Urea Complex (SAMUR), the third fertiliser plant operated by Petronas in the country, with a capacity of producing 2,100 tonnes of fertiliser per day, or up to 1.2 million tonnes annually.

Sabah was also prospecting in the industry through Sabah International

Petroleum Sdn Bhd, an investment arm under Sabah Development Bank.

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