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 Local

Oil interests loom as state govt legitimacy in limbo

12th June, 2018

KOTA KINABALU: Who has the reins of the State government, and how should the state respond to the on-going Petronas suit over the Petroleum Development Act (PDA) 1974?

The answer or answers is/are as good as anybody’s guess and dependent on which side of the political tussle you are on. But it could turn out to be a huge loss to the state in terms or forsaking its fight for control of petroleum rights and a state administration deteriorating into a limbo.

After the May 9 general elections, Sabah had a Chief Minister sworn in on May 10 and another on May 12. The latter, Datuk Seri Mohd Shafie Apdal, is running state affairs from the Chief Minister’s office on the 30th floor of the new state administrative building in Likas. His cabinet members are also operating from their respective ministerial offices.

But not if you asked the first Chief Minister sworn in, Tan Sri Musa Haji Aman. Insisting he is still chief minister, he issued a statement on Monday night instructing the Sabah Attorney General (AG) to intervene in the Petronas lawsuit.

The case will be heard today (June 12) in Putrajaya.

Shafie has not officially responded to reports on the Petronas suit. However, one of his Members of Parliament, Datuk V K Liew of Batu Sapi, said Petronas’s case was directed at Sarawak, and its case differs from that of Sabah.

Liew’s special officer, Yap Man Kun, said on Monday that there was no need for a Sabah response at the moment. He lambasted former Sabah Special Task Minister Datuk Seri Teo Chee Kang for not understanding the case. Teo, who said he was disappointed that the state government had not commented on the case, is a lawyer. V K Liew is also a lawyer.

Though his whereabouts are unknown, Musa was reported as expressing great concern over the Petronas’ attempt to seek a court declaration that it has the rights to all oil and gas reserves in Sabah and Sarawak by virtue of the PDA, in the statement.

“We view with great concern that the outcome of the said Application and the interpretation of the Petroleum Development Act 1974 will have a direct effect on the oil and gas industry in Sabah which may lead to dire consequences.

“As such it is only prudent for us as the responsible State Government to intervene in the said Application and to act in the best interests of the state and all Sabahans.

“With these circumstances in mind, I will instruct and direct the Attorney General of Sabah to make an application for the State Government of Sabah to intervene in the above Federal Court Proceedings,” said Musa’s statement. He added that the state AG is to attend to all necessary matters required to intervene in Petronas’ legal application, so as to safeguard Sabah’s oil and mineral resources.

“We will deploy all available resources of the State Government to ensure that the best interest of Sabah are defended always,” Musa ended.

On June 4, Petronas applied to the Federal Court seeking a declaration on the PDA to declare its exclusive ownership of the country’s petroleum resources, including Sarawak.

Sarawak had announced in March that it would set up Petroleum Sarawak Berhad (Petros) that would begin regulating the state’s oil resources beginning July.

Sabah Opposition party leaders, Datuk Jeffrey Kitingan from Parti Solidariti Tanah Airku and his Sabah Progressive Party counterpart Datuk Seri Yong Teck Lee have both called on Shafie, sworn in as chief minister on May 12, to intervene in the case.

Sabah and Sarawak are major oil and gas producers in Malaysia. Through the PDA and the Continental Shelf Act, the off-shore reserves of both the states come under the control of Petronas, with each receiving the so-called royalty of 5% per annum. The legality of both the laws are being questioned as both east Malaysian states sought to have greater autonomy on the natural resources, with some quarters calling for the royalty to be increased to 20%.

Therefore, it is perceived that Petronas’ attempt to reaffirm its ownership of the oil and gas rights could jeopardise the interests of Sabah and Sarawak.

The discontent of the two states insofar as having their resources completely under Petronas control has never been far from the surface. The Barisan Nasional’s loss of control of the government recently is seen by many an opportune time for the east Malaysian states to assert their rights and challenge laws like the PDA which has been in place for decades.

   
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