Kelantan is legally entitled to five percent royalties from oil extracted from petroleum resources from Malaysian waters offshore of Kelantan.

tengku razaleigh ku li interview 190309 02 Tengku Razaleigh Hamzah ( right ) said this in reply to a query by Kelantan Mentri Besar Nik Abdul Aziz Nik who sought his advice on the matter last month.

The PAS-led Kelantan state government is seeking RM1 billion in oil royalty it claims it is owed by the federal government and made it a campaign issue during the Manek Urai by-election.

Nik Aziz had written a letter to Tengku Razaleigh seeking his advice on the matter on July 16.

'I signed the deal'

In a written reply today, Tengku Razaleigh said that under the Petroleum Development Act, Petronas must pay five per cent of the value of oil found on-or-offshore any Malaysian state or federal territory.

Tengku Razaleigh, the founding chairman and CEO of Petronas, said he signed an agreement on behalf of Petronas in 1975 to pay the five percent oil royalties to Kelantan state goernment.

"The late Datuk Mohamed Nasir signed on behalf of Kelantan as Menteri Besar and I signed on behalf of Petronas as its chairman," said Tengku Razaleigh.

"There is no ambiguity at all. Petronas is bound by the agreement. It must make the cash payment to the Kelantan state government," said Tengku Razaleigh.

"The Petroleum Development Act is still in force."