Has Chief Minister Adenan Satem failed in his effort to negotiate with Petronas for the 20% increase in oil and gas royalty?

The question was came from  Sarawak DAP chief Chong Chieng Jen after reading Adenan’s  statement that the state has been offered 10% equity by Petronas in Malaysia Liquefied Natural Gas 4 (MLNG 4).

In announcing the offer recently, Adenan ( left ) said that this was the result of the State’s negotiation with Petronas to hike up the oil and gas royalty to 20%

Chong who is MP for Bandar Kuching and State Assemblyperson for Kota Sentosa warned the chief minister not to link the 10% equity with the 20% increase in oil gas royalty that the State has been asking for.

“By linking the two together, the State Government is trying to confuse Sarawakians and giving a false perception that the BN Government is partially acceding to the State Government’s demand for 20% oil royalty,” he said.

Adenan and his advisers should be very well aware that the MLNG 4 equity was a totally separate matter to the oil and gas royalty 20% .

“The 10% stake in MLNG 4 involves an equity participation in the company up to 10% shareholdings.  It is just like buying the share of a company.

 

Sharing of nature’s cake

The State Government will get 10% declared dividend in the event that the company makes profits. It is basically an investment by the State.

“On the other hand, 20% oil and gas royalty involves payment of 20% of the value of the oil and gas extracted from Sarawak.  Such payment must be made regardless whether Petronas makes any profit or not.  

“As opposed to the 10% investment in MLNG 4, the 20% oil and gas royalty is actually the right of all Sarawakians.

“In a fact, the demand for 20% oil and gas royalty is an assertion of Sarawak’s rights. Nor should it be substituted with an increase in development expenditure allocation from the Federal Government,” stressed Chong ( right ).

More importantly, he pointed out this MLNG 4 plant is the fourth such   plant in the state.  For MLNG 2 and MLNG 3, the state has been holding 10% stake in their respective shareholdings since the 1990s, so there is nothing new about the whole affair.

“As such, to claim that Sarawak is offered 10% in MLNG 4 is a result of the negotiation for the 20% oil and gas royalty is to concede that we are not making any headway in the said negotiation,” he said.

Chong said that Adenan should let Sarawakians know the truth  and what transpired in the latest round of negotiation with Petronas.

“I urge the State Government to focus on the execution and carrying out of the unanimous resolution passed in the Dewan Undangan Negeri Sarawak at the May sitting, that is,to  demand an increment in the Oil and Gas Royalty from the present 5% to 20%,” he added.