Sabah to study converting oil money into Petronas shares, says CM

KOTA KINABALU: The Sabah government will conduct a comprehensive study over the proposed conversion of 20% of its oil royalty claims into equity in national oil and gas company Petronas, says Chief Minister Datuk Seri Hajiji Noor.

In his winding-up speech on the state budget 2021, Hajiji, who is also Sabah's Finance Minister, said research was needed to see whether this would benefit the state.

“This consideration will take into account the total net worth of Petronas.

“This is important to determine the amount of shareholding, as well as the returns for the state government, whether the dividends to be received could accommodate the state’s development (needs).

“The financial standing of Petronas should also be considered as dividend issuance will be based on the company’s financial capability.

“This is among the risks that will be faced by the state government, and therefore, it is necessary for the government to conduct a thorough study before deciding, ” he said at the state assembly sitting on Wednesday (Dec 23).

On Monday, when debating the state budget, Parti Warisan Sabah president and Senallang assemblyman Datuk Seri Mohd Shafie Apdal urged the state government to continue asking for Petronas equity as was agreed in principle by Tun Dr Mahathir Mohamad when the latter was helming the country.

The ex-chief minister reasoned that it would potentially “paralyse" Petronas if the company had to pay oil royalty of 20%, and if Sabah obtained shares instead, Petronas just needed to continue paying the royalty at 5%.

On another matter, Hajiji also lambasted elected representatives asking Sabah not to depend on the Federal Government, as these were the same individuals criticising the allocation received by Sabah in Budget 2021.

“I think we should remain grounded in facing the reality – we should not simply point fingers with ‘blame the federal’ sentiment, when the fact is we need close cooperation with the Federal Government.

“There is no issue of dependency or the opposite, as the reality is that the Federal Government also belongs to the people in Sabah.

Meanwhile, in his winding up speech, Deputy Chief Minister cum State Works Minister Datuk Seri Bung Moktar Radin said his ministry would collaborate with the state Rural Development Ministry to create a database of road developments to be prioritised.

He explained that previously road projects were divided into eight categories, and it was hard for some to get allocation.

“How can we ask for allocation without proper data. With a database to know what it needed from each 73 state constituencies, we can come up with one combined budget (request) to forward it to the federal for allocation.

“We need to come up with out-of-the-box solutions, and I will be firm on this, ” he added.

Bung also suggested the possibility of privatisation as a means of solving longstanding treated water service issues in Sabah.

“We might need to privatise water (utility) or else, regardless of who the Chief Minister is, the problem will not be solved.

“My ministry will present a short, medium and long-term direction for water supply infrastructure to the Chief Minister, ” he said.

On electricity, he said if Sabah Electricity could achieve a high degree of efficiency within five years. Then it would be the right time for Sabah to retake the power utility company with zero debts.

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