Monday January 21, 2013
A win-win strategy
By VANES DEVINDRAN
KUCHING: Talks are under way between the Federal and state governments on a new formula that will benefit Sarawak with regard to its new crude oil and gas discovery in Miri city.
Rather than seeking higher royalties, Sarawak will be looking to use corporate means like obtaining higher equity in the national oil and gas company for better returns.
Housing Minister Datuk Amar Abang Johari Tun Openg said he could not reveal what the formula was as it involved public-listed companies but he believed that Federal leaders would recognise this as a win-win formula for both sides.
“(Oil) royalty is not the only means to determine our revenue. The state leaders have other formulas to be discussed with the Federal Government with regard to the oil and gas industry like increasing our stake (in Federal-owned oil and gas companies),” he told reporters at SK Rakyat here yesterday.
He said such corporate negotiations would maximise the benefits coming from the oil and gas rather than having Sarawak depend on a fixed amount of royalty.
Johari cited Bintulu Port as an example of such corporate exercise whereby the state now had better shareholding in the Federal-owned port. Another example, he said, was the MLNG in which Sarawak’s interest had been safeguarded.
“It’s like the production sharing that’s taking place between Petronas and Carigali. So we will look at the formula and improve on it,” he said.
He conceded that the returns would depend on the profit made by the companies.
Nevertheless, he felt this was better than depending on something that had been fixed.
According to him, it was unlikely that this discussion could be concluded by this year for there were several factors to consider.
In the meantime, he called on the people not to be carried away by calls from the Opposition for an increase of 20% oil royalty for Sarawak.
“Don’t be influenced by such talks. There is more to it than that and it is definitely better than a fixed royalty. The leaders in the state know what to do. It’s a corporate exercise which involves the business sector and in this exercise, we want to see what our interest is,” he added.
Calls for Sarawak to get more than its current 5% royalty are getting louder especially now with the new discovery of crude oil and gas in Miri. Many felt that since the discoveries were made in Sarawak, the state should have more control over the natural resources.
It was reported that this was the first time in about 25 years that the “black gold” has been found in such sizeable volume inland in Malaysia.
The onshore discovery was made by Petronas and Nippon Oil and is poised to open up new frontiers in oil and gas exploration inland.