Pakatan Rakyat has proposed forming a caucus to deliberate the issue of petroleum and liquefied gas royalties and have approached veteran politician Tengku Razaleigh Hamzah to take the lead.

NONE Razaleigh (BN-Gua Musang) was seen in a meeting with Opposition Leader Anwar Ibrahim (PKR-Permatang Pauh), Saifuddin Nasution (PKR-Machang) and Salahuddin Ayub (PAS-Kubang Kerian) as well as Tian Chua (PKR-Batu) in Parliament today on the matter.

"They have proposed to form a caucus on oil because oil is a very hot subject being debated between the government and particularly, state representatives.

"They think that through the caucus there could be some kind of logical reasoning... to arrive at an amicable solution to the problem," said Razaleigh later.

The issue of oil royalties has been a hot topic in Parliament this session. It stems from Prime Minister Najib Abdul Razak's announcement that the federal government will make 'goodwill payments' from offshore oil operations to the PAS-ruled state of Kelantan beginning next year.

Opposition legislators, especially those from Kelantan, however, cried foul over the announcement saying that the state government deserves its rightful gains and not charity.

So far, the government has refused to budge from their position that oil extracted beyond three nautical miles of Kelantan's territorial waters does not belong to the state.

Minister in the Prime Minister's Department Mohd Nazri Abdul Aziz insisted when winding up the debate on the matter early this week that the term "royalty" was not specifically cited in the agreement and the Petroleum Development Act 1974, in referring to the five percent from oil revenues paid to oil-producing states.

Nazri also argued that the territorial boundaries and the definition was not stated in the agreement in 1974.

'It's the constitutional right of the people'

However, Razaleigh, who was involved in drafting the Act in 1974 and was finance minister during the period, stressed that the oil royalty belongs to the people.

"It is a constitutional right of the people whether if it is found onshore or offshore. I think it was indeed in the agreements signed between the states and Petronas (national oil company) that the states where oil is found onshore or offshore will benefit from such funds," he said.

tengku razaleigh.jpg He told reporters at the Parliament lobby that he has not decided whether he will head the caucus but is considering it.

"I will be following the development and see whether I can contribute because after all I was involved in the oil business starting with the formation of Petronas, administration with the states, the drafting of the laws so probably I can help," he said.

He stressed that the he would do "anything to protect the constitutional right of the people in the states".

The suggested caucus is not only for Kelantan, he said, adding that it involves all states where oil is extracted onshore or offshore.

"There is no such thing as wang ehsan (goodwill payment) because oil is the right of the people and it is not for the federal government to distribute as a largess."

Asked whether Najib was wrong in citing royalty as goodwill payment, Razaleigh said, "Well that is left to your interpretation."