Withers Borneo States’ Hope For Increased Oil Royalty

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KOTA KINABALU: The Prime Minister has been quoted as saying that that giving 20 per cent to the two states would mean that Petronas would no longer become the international oil company that it was.

Tun Dr Mahathir Mohamad was quoted in a Bernama report from New York today that it was not viable for Sarawak and Sabah to have their oil royalty raised to 20 per cent.

The 20 percent royalty was promised by the Pakatan Harapanin its election manifesto.

He was quoted saying that the PH government has since realised that giving 20 per cent to the two Borneo states would mean that Petronas would no longer become the international oil company that it was.

“So we have to appeal to the Sabah and Sarawak governments that it is really not workable,” he said at a dialogue session with fund managers at the JP Morgan headquarters here on Thursday.

“They don’t want to kill Petronas but at the same time they want more money, so we’re trying to work out how we can give them more money without undermining Petronas’ own strength,” Dr Mahathir said.

On Sept 13, Finance Minister Lim Guan Eng had hinted that the long standing wish of the two states to raise the oil royalty from five per cent to 20 per cent might not materialise.

He said legacy issues from the previous government were preventing the implementation of promises under the PH manifesto, especially the oil royalty for Sabah and Sarawak.

“The previous government caused an enormous amount of funds to either be wasted or put Malaysia in trouble. You are looking at funds of RM150 billion, which is not a small sum. This has definitely posed a challenge for us in implementing our promises.

“At the same time, I am sure we will announce certain measures to show our prioritisation of Sabah and Sarawak has not diminished,” he had said.

PH had toppled the Barisan Nasional government in the general election in May last year on the back of the manifesto, which among others pledged to raise the royalty of oil producing states to 20 per cent or of its equivalent value.

Meanwhile, Dr Mahathir revealed today that the government was mulling the possibility of listing one of Petronas’ subsidiary to make Bursa Malaysia more attractive.

He said Petronas Carigali was one of the candidates, adding that there were also other possibilities.

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Dr M: 20pct oil royalty for Sarawak, Sabah ‘really not workable’