Kelantan PAS today submitted a memorandum to the Minister in the Prime Minister's Department Mohd Nazri Abdul Aziz on the state's claim for petroleum and liquefied gas royalty amounting to almost RM1 billion.

The memorandum stated that the state should be receiving oil royalty for petroleum extracted at its coastal borders instead of ‘wang ehsan', or goodwill money, as announced by Prime Minister Najib Abdul Razak last week.

Najib had announced in the Parliament that the PAS-ruled Kelantan would be receiving the goodwill money from 2010.

However Kelantan PAS youth chief Abdul Latif Abdul Rahman said today that the prime minister was wrong in giving out goodwill payment in return for oil extracted from the state.

He backed his claim by attaching in the memorandum a parliamentary debate in 1974 when the Petroleum Development Act was passed.

"Then, the former chief minister of Sarawak Abdul Rahman Ya'kub had said that a state has the right of power, freedom and privilege to petroleum not only on land but also offshore including the continental shelf," said the memorandum.

"He had also said that national oil company Petronas had agreed to make a certain percentage of payment to the state government," it added.

The then Prime Minister Abdul Razak Hussien had also said at that time that every state that had signed the agreement will be given five percent from the sale of the petroleum and liquefied gas extracted within the coastal border or outside the waters of the states, stated the memorandum further.

Don't want charity

Abdul Latif said that the situation as envisaged by the Parliament in the passing of the Act in 1974 was different from what was said by Najib in Parliament last week.

The prime minister said that Kelantan has no right to ask for royalty as petroleum was being extracted beyond three nautical miles of the state's coastline.

Abdul Latif said Najib should not equate goodwill money to royalty, adding that the premier should apologise to the people of Kelantan for shortchanging them.

He said the state was not willing to accept "charity" from the federal government and will insist on their rights for royalty.

Kelantan wants almost RM1 billion annually in royalty for oil that is being extracted from Cakerawala gas field since 2005.