The Kelantan government has withdrawn its oil royalty suit completely via a notice of discontinuance of the legal action against the federal government.

This was revealed by the PAS-led state government's lawyer Aleeya Elyana Ahmad Mahreez.

"Parties have signed (before Ahmad) the notice of discontinuance of the Kuala Lumpur High Court suit.

"(The judge made) no order as to cost, with no liberty to file afresh," she said, adding that the notice will be filed today.

She was speaking to reporters after attending case management of the matter in the chambers of Kuala Lumpur High Court judge Ahmad Bache.

On whether the withdrawal signifies the settlement of the oil royalty issue that had plagued federal-state government relations for a long time, senior federal counsel Natrah Idris said it does not touch on the issue.

"(The withdrawal) has nothing (to do with oil) royalty. It is just a withdrawal of the suit," said Natrah, who acted for the federal government.

Lawyer Syukran Shafiq appeared for Petronas, which was originally named as the first defendant in the oil royalty suit.

On May 17, it was reported that the Kelantan state government had dropped the suit against Petronas.

The Kelantan state government filed the suit against Petronas in 2010.

However later, the federal government succeeded in its application to intervene in the matter as a defendant.

On March 7, it was reported that the federal government would pay oil royalty to Kelantan after the completion of the withdrawal of the state government's lawsuit.

In saying this, Economic Affairs Minister Mohamed Azmin Ali said the state government had begun the withdrawal proceedings which were expected to be settled soon.

“After the proceedings are settled, we will execute what we have promised by making the payment (of oil royalty) directly to the state government,” he said.

Azmin said the federal government had made all oil royalty payments for 2018 to Terengganu while Kelantan only received a portion of the payments for 2018 due to the legal dispute.

Kelantan Menteri Besar Ahmad Yakub renewed the claim for oil royalty with the federal government on Jan 14, at an official meeting with Prime Minister Dr Mahathir Mohamad in Putrajaya.