How Musa Aman Lost Sabah’s Oil And Gas – Through Sheer Ignorance

Zainnal Ajmain

LETTER: Instead of how Sabah secured 25% equity on inland oil and gas, the title of the news should be “How Musa Lost Sabah’s Oil and Gas Through Sheer Ignorance.

In the first place, how can Musa (Aman) claim that he managed to secure 25% of inland oil, and gas exploration and extraction, when all the oil and gas reserves belongs to Sabah. Why does the Chief Minister need to secure anything from anyone even to the extent of getting help from the Prime Minister? It is Sapurakencana and Petronas Carigali who need to secure the concessions from Sabah, and NOT Musa begging them to give crumbs?

The Petroleum Development Act 1974 (PDA74) is NOT enforceable in Sabah and Sarawak’s territorial waters, and because of this, the PETRONAS agreement signed on 14 June 1976 is NOT a valid agreement. The PDA74 denies Sabah and Sarawak from collecting royalty on Oil and Gas – please refer to section 4 of this PDA74.

The Corporation (Petronas) can only pay Cash Payment. The 5% paid to Sabah and Sarawak is therefore, cash payment and NOT royalty payment. This contravenes provisions given in the Constitution meant to protect and safeguard Sabah and Sarawak against such action. Sabah and Sarawak should be paid royalty so that Sabah and Sarawak can collect dividends from these ventures. As it is now, it is the Federal Government which collects dividends from Petronas, and NOT Sabah and Sarawak.

The Malikai tension-leg platform (TLP), 100 km offshore Sabah will have a peak production expected to reach 60,000 barrels per day.

The procedure and quantum to collect royalty is based on a maximum of 10% the value of Export Tax of crude petroleum. This is given in the Malaysia Constitution. Unfortunately, the export of crude petroleum from Sabah is through Labuan, and in Sarawak through Bintulu. This means Sabah and Sarawak has no way to determine the export tax for crude petroleum and so to determine the amount of royalty. But this however is just manipulations by the central government to deny Sabah and Sarawak from collecting royalty.

Perhaps the Central government or Petronas did not realise that by 2012 the extent of Sabah and Sarawak territorial waters is no longer limited to 3 nautical miles. (Please refer to Emergency (Essential Powers) Ordinance No.7 of 1969, after the lifting of the State of Emergency in 2011.) All the points of export of crude petroleum are no longer within the confines of a Federal Port or the Federal territory; it lies within the Sabah and Sarawak territorial waters.

Therefore, Sabah and Sarawak has the right to impose royalty based on the tax value of crude petroleum exported. This will enable Sabah and Sarawak to also collect dividends from all offshore activities. This is because the Federal Government or Petronas is no longer the owner of all the Oil and Gas reserves; it all belongs to Sabah and Sarawak.

The Emergency (Essential Orders) Ordinance No.7 1969, The Continental Shelf Act 1966 and the Petroleum Mining Act 1966 is no longer applicable or enforceable to Sabah and Sarawak after the lifting of the State of Emergency on 24 November 2011. The replacement Act such as the Territorial Water Act 2012 or ACT750 is unconstitutional because the State of Emergency was already lifted. Furthermore, ACT 750 encroached into provisions that protect and safeguard Sabah and Sarawak given in the IGC, Malaysia Agreement 1963, Sabah Land Ordinance Cap68 and the Malaysia Constitution.

This means that even when the territorial water was taken from Sabah and Sarawak by force, was legal, after the lifting of the State of Emergency, everything which was taken by using the State of Emergency now revert to Sabah and Sarawak automatically. ACT 750 even though passed by parliament cannot be applied to Sabah and Sarawak because parliament has no authority to take over land matters in Sabah and Sarawak and it has no authority to take over the territorial waters that was given to Sabah and Sarawak by Her Majesty the Queen of Great Britain through an Order in Council 1954. Most important of all, there was no consent ever given by the Sabah State Legislative Assembly to the central government or to parliament. The Sabah MPs in parliament does not represent the Sabah State Legislative Assembly, the MPs represent the federation.

The irony of Musa’s statement was that at the State Assembly sitting on July 14 – 16 July 2014, Musa as the Chief Minister gave a written answer to the Assemblyman of Kapayan that because of the lifting of the State of Emergency, the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 was no longer applicable and enforceable to Sabah and there is no need to inform the Federal government.

Musa therefore, knows about the continental shelf reverting back to Sabah, which means he also knows whatever is in the sea also belongs to Sabah, so why is Musa saying, “what you get from the sea is your business” – even the sea belongs to Sabah and the people – it does not belong to Musa alone – Musa has no right to say that.

Therefore, should Musa be praised that he managed to secure 25% of concessions to Blocks SB330, SB331 and SB332 when Sabah owns all these blocks and NOT Petronas or the Federal Government? Or should Musa be charged as the Chief Minister, and in charge of the negotiations with Sapurakencana and Petronas Carigali, for negligence and failure to perform his fiduciary obligations to protect and safeguard Sabah rights as provided for in the IGC, Malaysia Agreement 1963, Sabah Constitution, Sabah Laws and the Malaysia Constitution.

Perhaps this must be one of the reasons in his “My vision for Sabah” speaking to over 400 Rotarians in their first-ever intellectual discourse initiative in Kota Kinabalu recently, there was no mention of the IGC and Malaysia Agreement 1963 in his speech. It confirms the idea that Musa is not really concerned about Sabah and the people, rather he prefers to apple-polish and curry favour to leaders and elite in Putrajaya.

It is perhaps time that Sabahans should rethink the type of Chief Minister that they should elect to lead Sabah.

  • Zainnal Ajamain is an author as well activist for Sabah rights based on the Malaysia Agreement 1963, and the call for a better deal for Sabah’s Oil and Gas, among other things. The opinions expressed herein are that of the writer and is not necessarily endorsed by BorneoToday.