A special cabinet committee has been set up to oversee matters relating to the 20 percent oil royalty payment to oil-producing states, said Economic Affairs Minister Mohamed Azmin Ali.
He said the committee which comprised representatives of four states including Sabah had been given six months to prepare a proposal paper on the matter.
"The government needs to consult with the Sabah and Sarawak state governments about the matter and fulfil terms of the Malaysia Agreement 1963 (MA63)," he told reporters after a meeting with Sabah PKR leaders in Kota Kinabalu today.
According to Azmin, among the matters to be discussed was whether royalties would be paid from the net profit, or whether it would be based each state’s oil and gas production.
"I have to discuss with Sabah and Sarawak (in order for them) to come up with their recommendations.
"However, as I have mentioned in Parliament, we should also take into account the country's financial position," he said.