Federal Play To“Steal”Sabah’s Oil- Jeffrey

Kota Kinabalu:    “The revelations by Tan Sri Majid Khan that the explanations of the federal leaders in the 1970s that only oil found on-shore belongs to Sabah and that found off-shore belonged to the federal government clearly proves that the federal leaders from Malaya were prepared to concoct lies and bent on taking over, “stealing”, Sabah’s oil and gas resources at all costs” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief when commenting on the untold story presented by Tan Sri Majid Khan at the recent forum “The Formation of Malaysia – The Untold Story” organized by The Sabah Society.

Tan Sri Majid went on to add that what was said is true or lawful was another matter and it was up to the present Sabahans to take the matter to court to determine its legitimacy.

Obviously, the lies were perpetuated to “persuade” Sabah leaders then to sign the Oil Agreement and agreeing to accept 5% as “cash payment” for ownership of the entire oil and gas resources in Sabah to Petronas.  Sabah’s oil and gas were earlier unlawfully vested in Petronas on 27 March 1975 by the late father of the present PM and what was left was for the federal leaders to “persuade” Sabah leaders to accept 5% for the purported vesting of the oil resources in Petronas.

Apparently, Tun Mustapha and TunFuad were not taken in and refused to sign the Oil Agreement including the proposed signing on 6 June 1976 and the resultant tragic air-crash which killed TunFuad and other senior Sabah leaders later that evening.

The lies of the federal Malayan leaders are easily dispelled.

Firstly, in 1954 the international boundary of Sabah (North Borneo then) was extended to include the area of the continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of North Borneo by The North Borneo (Alteration of Boundaries) Order in Council 1954 made on 24 September 1954 by Her Majesty at Buckingham Palace in London.

Secondly, the 1963 Federal Constitution provides that the territory of Sabah as the territory comprised therein immediately before Malaysia Day on 16 September 1963 which is the 1954 international boundary.

Thirdly,when Petronas was formed in 1974, 4 of the 19 oilfields in Sabah and Sarawak were already producing about 99,000 barrels per day.

Fourthly, petroleum resources in Sabah including licensing and collection of royalties as Sabah’s revenue comes within the ambit of Section 24 of the Sabah Land Ordinance (Cap. 68) which was passed in 1930, long before the formation of Malaysia.

Fifthly, under Article 74 of the Federal Constitution, land matters which include petroleum resources come within the authority of the State List in the 9th Schedule.Permits and licences for prospecting for mines, mining leases and certificates also come within the ambit of the State List in the 9th Schedule.

It is clear that the Malayan federal leaders had no legal basis to assert that the oil resources lying off-shore Sabah belonged to the federal government.

Moreover, the Malaysian Parliament has no business legislating the Petroleum Development Act, (PDA) 1974 when the matters come within the ambit of the State List in the 9th Schedule.   The PDA is a worthless unconstitutional legislation, yet, it is still used to siphon off 95% of Sabah’s oil and gas resources until today without a whimper of objections from Sabah BN leaders.

To compound matters, the late TunRazakhad no legal authority and no jurisdiction over Sabah’s oil and gas when he illegitimately and unlawfully signed the Vesting Order on 27 March 1975 vesting Sabah’s oil and gas resources to Petronas,

And to rub salt into the wound, Sabah leaders signed in 1976 acceptance of 5% as the cash payment for the vesting of Sabah’s oil and gas to Petronas and allowing Petronas to “steal” the other 95%.

The foolishness is made worse when they agreed to waive the imposition of royalties on the oil and gas produced which otherwise would have been payable by Petronas and the major oil corporations under Section 24 of the Land Ordinance. 

The loss of these royalties would have been between 12% to 30% if the figures given by TengkuRazaleigh is any yardstick to go by.   A 30% royalty on the RM18 billion collected by Petronas would have netted the Sabah government an additional RM5.4 billion in additional revenue in 2012 to the RM3.7 billion State Budget revenue collected locally.

As advised by Tan Sri Majid, the ball is now at the feet of present-daySabahans to take up the issue of ownership and revenue sharing of Sabah’s oil and gas resources.   It is apparent that the current Sabah BN leaders cannot be relied upon to pursue the matter especially when the Chief Minister has given the hint to other leaders to keep quiet when he said that there is no urgency on review the oil payment from Petronas.