Petroleum or hydrocarbon is the most precious natural commodity in the modern world today. It is the bloodline of many communities, economies, countries, regions and even trading/economical/political bloc. Wars have been fought for the sourcing and control of the ‘black gold’. In Malaysia, it has been a political tool and agenda, especially now. Access and control of it will determine the political standing and clout.
Recently, the announcement of dishing out ‘Compassionate Payment’ (wang ehsan) to PAS controlled Kelantan is the hottest political issue for the week. For years, PAS has been asking Federal Government to dish out what they perceived as ‘royalty’ from the proceeds from the oil and gas extracted from fields off the coast of Kelantan.
Why Prime Minister VI Dato’ Seri Mohd. Najib Tun Razak announce this and now, it is still not clear. The Federal Government is dishing out the ‘Compassionate Payment’ to Kelantan via the various Federal Government agencies and not directly to PAS controlled Kelantan Government and/or their agencies.
The fact is that, Federal Government is not compelled to give any part of the earnings from oil and gas to any of the states, including Kelantan. The Petroleum Development Act does not provide such provisions but instead named Petroliam Nasional Berhad (Petronas) as the sole custodian to all matters pertaining oil and gas. As per reported, the agreement signed between the Petronas and Kelantan State Government dated 9 May 1975 still falls under the Petronas Development Act.
The state borders have been determined at lesser than three nautical miles from the shores. The international boundary is set at 12 nautical miles. The oil and gas fields of the Eastern Coast of Peninsular Malaysia is hundreds of kms from the shore. The drilling operations are actly carried out in Malaysian Exclusive Economic Zone (EEZ), which is 200 nautical miles (370 km radius) from the shore. Legally, that area should not be regarded as any part of any state. Hence, the right of claims made by the PAS Kelantan Government is invalid.
How the RM 1 billion demand was derived is still elusively unclear. If the amount is 5% of the ‘royalty’ from oil and gas extracted from Kelantan, it means that the oil and gas fields must have produced RM 20 billion worth of raw commodities.
Nineteen years under Opposition PAS control, Federal Government had not neglected Kelantan as per claimed by PAS. Social and economic development had been ongoing. Example is education. Not only MARA built another 3 MRSMs more, Kelantan now has it own university on top of the Kelantan branch of the UiTM and two polytechnics. Even the USM medical school and teaching hospital had been developed in Kubang Kerian. It is a known fact that Kelantanese lead the admisision entrance into heavily subsidized IPTAs and sponsored into IPTS.
The strength of retail as a tool to increase aggregate demand of the local economy is duly appreciated. To facilitate economic growth, Kelantan is the only state where Islamic and syariah compliant gold pawn system has been promoted and practiced. The Sultan Ismail International Airport also saw a brand new terminal. The petrochemical hub project in Pantai Senok, Bachok and fisherman wharf in Tok Bali, Pasir Putih are examples on how specific districts are being developed based on the suitable industry.
If PAS Kelantan controlled State Government has high hopes banking on the ‘royalty’ of oil and gas exploration as their ‘easy way’ but seemingly desperate attempt to generate income for the state coffers, then they would not go far with this bet. The truth is that, the oil and gas depository within Malaysia is actually depleting. Petronas is now extracting a little over 500,000 barrels day as compared to 650,000 barrels per day 10 years ago. This had been calculated to only another 8 years of productive explorations within existing fields. New fields is expected to be in deep waters and costlty. Petronas income from exploration is now at a 50:50 ratio between within Malaysia and abroad. If it is determined that the cost of production from these deep water deposits is high and demand for consumption is increasing, then it would not be too long that Malaysia becomes a net importer of oil as opposed to now, a net exporter.
Kelantan State Government should be examining their laws of prohibiting the transfer of land to non Kelantanese first. The liberalisation of land ownership and development restriction would be a catalyst for economic growth to spur and be generated. Recent commercial development projects within Kota Bahru illustrated the market sustainability for retail business is strong. Selangor has the history of how the state government, via PKNS manage to promote growth in new townships such as Shah Alam, Bangi, Klang, Kelana Jaya, Selayang and Ampang-Keramat since mid seventies.
The way forward for nation alternative and renewable energy. Despite the quantum of oil and gas exploration has been reduced significantly, Federal Government is still subsidizing RM 15 billion worth of gas annually for domestic consumption. Power generation accounts 60% of this subsidy. It is time that a thorough and comprehensive review on oil and gas subsidy given for the domestic consumption, taking into consideration the hike of electricity tariff will affect the industry, cost of production and eventually household spending. The profitablity of TNB should also be considered.
It is doubtful that PAS could gain productive legal grounds on this ‘oil royalty’ demand even they take the matter to court. What it probably do is to capitalise the issue and earn political mileage, as a precursor to the 13th General Elections (13 GE), expected within the next 30 months. This will probably ensure PAS still manage to retain Kelantan despite UMNO’s ability to regenerate it under the helm of PM Dato’ Seri Najib with his ‘1 Malaysia’ agenda.
Kelantanese should accept the ‘Compassionate Payment’ and move on with the Federal Government agenda to develop the state and rakyat. In the final analysis, PAS is at their best to play politics and manipulate the sentiments through endless polemics. The ‘Compassionate Payment’ is a good issue to ride, at least to sustain their existience into power by the 13 GE.
I feel somewhat sad that so much federal money for years poured into Kelantan.
For what? If it is for political gain then it is like “pouring water over ducks back”. To me it is a kin to Najib presently trying to please those chinese and indian voters to vote for BN. You will never get their support. It is a foolish act.
If it is for suppoting melayu, then I say what melayu? Can these melayu ever understand that these supports they have received and continue to receive also need political supports for them to be sustainable? Is it so difficult to understand?
They should look at their cousins across “Sungai golok”.
These malays are the same people who were nutured from kinder garden not to be thankful to any human but only to Allah. And because of that they will never be grateful. These disease has already spread to Trengganu.
Come GE13, they believe they will own the Federal Goverment and they will get much more than what Najib can ever give.
It is far, far better for Najib to take care the feelings of those Malays who are presently support the BN: less they destroy their votes again.
With a map given, they pretend not to understand that the oil field is far far outside their state boundry. It is the jurisdiction of Federal Goverment. It is the business of Federal Goverment.
By the way “Wang Iksan” should be given to other states as well.
mohamed
Agreed!
To be fair every state should receive the Wang Ihsan….
Yes, Foolish, Foolish, Foolish…Now the Ducks are going to peck him…..
They are going to terminate the Federal State Agreement and Screw up everything….
Aku setuju sangat!
Tak payah bagi apa apa kat org Kelantan ni. Dia org bukan peduli pun negeri mrk mundur. Mereka bersenang lenang dok negeri org cari makan. Bila time Raya & Raya Haji je sibuk berbondong bondong balik kampung. Tu yg dari KL sampai KB, 12-15 jam perjalanan!
Benar tu. Ada juga yang bawak balek kereta mewah.
Alangkah indahnya negeri-negeri disemananjung ini ikut cara Sabah dan Serawak.
Mana mana rakyaat Malaysia yang lain nak masuk negri mereka, mesti pakai passport. Lepas tu dibenar tinggal hanya sebulan sahaja.
Nak cari makan disana? Jangan haraplah.
mohamed
[...] instead of the ‘royalty’ demanded “Gratefu but not satisfied“. Hence, the Kelantan State Government budget for 2010 would be the least on the minds of Nik Aziz and Azizistas at this point of time. Possibly related [...]