KUCHING: The demand for the federal government and Petronas to admit and accept Sarawak’s legal ownership to oil and gas and generally the petroleum resources within Sarawak’s territory should be the state’s top priority in the ensuing negotiations with Petronas, said Batu Lintang assemblyman See Chee How.
At the same time, See, who is a member of Parti Sarawak Bersatu (PSB) Presidential Council, said the establishment of a Sarawak Wealth Fund under the watch of the Sarawak State Legislative Assembly, to manage the state’s petroleum wealth is equally pressing.
“I must congratulate the Chief Minister and the state government for procurement the sum of RM2,956,671,407.36 from Petronas through the imposition of the State Sales Tax.
“The sum collected from the sales tax means that the sales revenue collected by Petronas, from Sarawak was a massive RM59,133,428,147.20 in 2019.
“Together with the other petroleum conglomerates, Sarawak’s sales revenue from petroleum and petroleum products would have been in excess of RM61 billion in that year,” he said in a press statement yesterday.
See was commenting on Petronas and its subsidiaries’s full settlement of payment of State Sales Tax on petroleum products for 2019, as assessed by the Comptroller of State Sales Tax in accordance with the provisions of the Sarawak State Sales Tax Ordinance, 1998.
He said for the first time, it has come to public knowledge as to the petroleum proceeds that the national oil company and its network of contractors and subcontractors had acquired from Sarawak, which is six-times our annual state budget.
“Undoubtedly, there are enormous production costs involved, and Petronas with its contractors and subcontractors have to bear the huge contributions to the federal government in corporate tax of 28 per cent and petroleum income tax (PITA) of 38 per cent, on top of the five per cent royalty payment. The federal government remains the biggest beneficiary and recipient of Sarawak petroleum proceeds.”
See said Sarawak is “grievously prejudiced by such unfair and inequitable distribution of the Sarawak petroleum proceeds” considering the fact that the state’s petroleum resources are depleting.
“It is therefore imperative for the state to regain legal ownership of our petroleum resources to fully protect our petroleum and other natural resources found within the territory of Sarawak to ensure its sustainability for the benefits of our future generations.”
He said the state must be firm and be ready to seek legal redress on the infinite application and exercise of the provisions and authorities under the Petroleum Development Act 1974 and Territorial Sea Act 2012, to end the illegality, unconstitutionality and injustice.
“The Chief Minister has revealed that the state government will now focus on the discussions with the federal government to reach a ‘commercial settlement’ on matters relating to oil and gas found and produced in Sarawak.
“It is my hope that the state government will go back to the State Legislative Assembly before it reaches any agreement with the federal government and Petronas, including the terms for a commercial settlement, to ensure that the settlement thus reached are transparent, authorised, legitimate and proper.”
See reiterated that the position put forth in the DUN Consultative Committee that any “commercial settlement or arrangement” must include but not limited to the following terms or arrangements:
1. The State Government and Petronas to devise and implement a 5-years localisation plan to realise full Sarawakian administration, management and operation of Petronas’s Sarawak Operation, including but not limited to granting full autonomy on the award and manage contracts for management of existing and future assets within the territory of Sarawak;
2. Sarawak to be given 50 per cent of asset ownership and 20 per cent of net profit from all operations from existing and future assets in the State;
3. To declare Sarawak’s ownership and sovereign rights, powers, liberties and privileges of exploring, prospecting, exploiting, winning and obtaining petroleum whether onshore or offshore, including the granting of oil and gas mining leases and to enter into production contracts over the remaining blocks and fields of oil and gas potentials yet to be awarded with production sharing contracts (PSC).
See said: “At the same time, we must strengthen our state institutions including the setting up of a state sovereign wealth fund under the purview of the State Legislative Assembly to oversee, manage and undertake all resource development projects in Sarawak, to ensure that all Sarawakians will have a fair share in ownership and to derive equitable benefits from them.”