KUCHING: The decision on the increase of oil royalty from five to 20 per cent lies with the federal government, disclosed Chief Minister Datuk Patinggi Tan Sri Adenan Satem in his winding-up speech at the State Legislature Assembly yesterday.
However, he was pleased that the state government had made progress on the five key areas of negotiations with Petronas.
He said despite the drop in oil prices that had affected its revenue, Petronas was willing to accede to the state’s requests.
Adenan revealed that Petronas had agreed to supply to Sarawak Energy Berhad (SEB) 250 million standard cubic feet per day (mmscfd) of natural gas for power generation for 20 years at RM15 per million British Thermal Unit (mmBtu) with 1.5 per cent escalation per annum based on the principle of firm supply contract, which is very much lower than the international market price.
In addition, he said Petronas was working out a mechanism to supply 200 million standard cubic feet per day (mmscfd) of natural gas for the non-power sector.
“This is important to the state especially in realising our SCORE development agenda as well as our industrialisation strategy. The supply of natural gas to the non-power sector will enable Sarawak to develop Bintulu as our petrochemical hub by attracting more petrochemical industries to invest in Bintulu and at the same time attracting more industries to invest in the Samalaju Industrial Park.”
He further revealed that Petronas had also increased the actual spending value for jobs awarded to Sarawak companies from RM2.1 billion in 2013 to RM2.4 billion last year.
“This is an increase of RM0.3 billion from the baseline value of RM2.1 billion worth of contracts to Sarawak companies. In the first quarter of 2015, Petronas has already spent RM350 million for the same purpose. Petronas will continue to improve and increase the value of contracts awarded to Sarawak companies.
“I would also like to inform that the number of licensed/registered companies with Petronas had increased from 314 in 2013 to 369 in 2014. To further improve the Sarawakian companies’ participation in the oil and gas industry, Petronas has rolled out strategies with Petronas Supply Chain Management Units and Petronas Product Sharing Contracts in February 2015,” he said.
Adenan further pointed out that a working committee comprising both Petronas and state representatives had been formed to monitor and track the progress of the oil and gas industry in the state.
“In the area of human resource, education and technical trainings, Pertonas in 2015 will spend about RM180 million on capital expenditure and educational sponsors and capacity building.
“We have witnessed earlier on March 7, 2015, during the SCAT Fair, Petronas had awarded scholarship to 150 students from MRSM Kuching, Betong and Mukah to encourage them to excel in their academic performance and another 150 VISTA scholarships to enable rural youth to undergo technical skill development to enhance their employability.”
For Corporate Social Responsibility, he said Petronas had allocated RM50 million over five years (2015-2019) on community outreach programmes, disaster relief support, infrastructure contribution and environmental conservation.
In addition, Adenan revealed that Petronas was also in active final discussion with the state government on the details of Shareholders Agreements on the 10 per cent equity in the MLNG Plant Train 9.
“We are also working with Petronas for more equity in MLNG 2,” he added.