KOTA KINABALU: Sabah is expected to begin negotiations for a commercial settlement with Petronas on the oil and gas resources in the state, says Chief Minister Datuk Seri Hajiji Noor.
He said Prime Minister Tan Sri Muhyiddin Yassin had announced that Petronas will meet with the new Gabungan Rakyat Sabah-led state government to begin immediate negotiations with Sabah on the deal.
Hajiji said the Prime Minister’s announcement came following Petronas and the Sarawak government signing a commercial settlement to resolve the state's sales tax and regulatory authority over oil and gas resources in Sarawak on Dec 7.
“Sabah appreciates the commitment of the Prime Minister who has instructed the Finance Ministry to immediately formalise the process of negotiations pertaining to the oil and gas industry between the two parties in Sabah, ” he said when tabling the Sabah Budget 2021 here Friday (Dec 18).
He said the Federal Government’s commitment to resolving the oil and gas issues was also expressed during the inaugural meeting of the Special Council on the Malaysia Agreement 1963 that was chaired by Muhyiddin on Dec 2.
“We are confident that the various major delayed issues underlying relations between the state and federal governments will be addressed wisely through these deliberations, ” he said.
Hajiji said the most important thing was to preserve the rights and interests of Sabah in the federation as well as increase the share of Sabah revenue to the development of the state.
On Dec 7, Petronas and the Sarawak government signed a commercial settlement agreement that gives Sarawak a greater share of revenues from oil and gas found and produced in the state.
The deal provides for a consultative framework where both parties will be able to jointly discuss and deliberate on matters of importance to the industry, including those which affect the interests of the state.
In the Sabah Budget 2021 tabled on Friday, the state expects an estimated revenue of RM1.25bil from the implementation of a state sales tax on petroleum products.
Hajiji also thanked Muhyiddin and the Federal Government for its commitment to further boost development in Sabah in the 2021 federal budget.
He said the Federal Government had allocated RM5.1bil for Sabah that included building and upgrading infrastructure such as water supply, electricity and road infrastructure as well as health and education facilities.
These include the Sabah Pan-Borneo highway, Sepanggar Bay Container Port project and also Sabah Development Corridor, among others, apart from other initiatives for the wellbeing of the people.
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