Nazri insists Kelantan not entitled to oil royalty

By Syed Jaymal Zahiid | The Malaysian Insider

KUALA LUMPUR, Nov 17 – The Parliament was in uproar this afternoon when Datuk Seri Nazri Aziz poured oil on the fire raging over the Kelantan oil royalty issue by insisting that the PAS-governed state has no legal right to demand the payment.

While winding up the Supply Bill debate, the Minister in the Prime Minister’s Department explained that former prime minister Tun Abdul Razak Hussein had not specifically used the term “royalty” when debating the Petroleum Development Bill in 1974 that established Petronas and agreements with the various oil-producing states to receive 5 per cent of the oil revenues.

“The agreement was made as a promise so that future administrations will respect it. It is a promise but not a right and his son, Prime Minister Datuk Seri Najib Razak, is respecting this promise by giving goodwill payment to Kelantan,” Nazri told the Dewan Rakyat.

The statement made by Najib’s father was recorded by the Parliament Hansard and has been used by the opposition as proof to their claims that the government had recognised the rights of Kelantan to receive royalty.

Apart from the Act, the agreement between then Petronas chairman Tun Salleh Abbas and its founder, Tengku Razaleigh Hamzah, that oil-producing states be given royalty, have also been used as opposition fodder to demand payment of royalty.

However, PAS lawmakers and their allies in the Pakatan Rakyat have been frustrated for weeks now by the government’s argument that oil extracted beyond three nautical miles of state waters don’t belong to the state as the territorial definition cannot be found in laws dictating state-federal government agreement on oil royalties.

The state waters definition was first mentioned by Najib in Parliament two weeks ago when he announced that the federal government will be giving “goodwill payment” to Kelantan instead of oil royalty.

It was again used by Nazri as the government’s defence on the matter but Ipoh Timur Lim Kit Siang blasted the reply a “a distortion of facts” and a desecration of the spirit that drafted the oil regulations.

Lim and other opposition lawmakers argued that the state waters definition given by the prime minister was nowhere to be found in any of the laws governing state-federal governments agreement on the matter.

“If you want to think it’s a distortion of facts, it’s up to you. The PDA does not mention royalty,” Nazri said in his reply to Lim’s outbust.

At this point, the House had already erupted into a warzone with several opposition MPs simultaneously blasting Nazri’s reply as absurd and inconsistent.

The House later calmed after opposition MPs felt it was no longer useful to argue with the minister who in his closing remark said, “whatever it is, I insist that Kelantan will not get royalty as oil is extracted beyond its waters.”

  1. #1 by Ramesh Laxman on Tuesday, 17 November 2009 - 8:00 pm

    I do not understand this debate. We have a federal system of government. The Tax collection function is undertaken by the central government. We do not have a provision for provincial or State tax. So how does the state finance its operation.It is the constitutional duty of the fereral government to provide fund to the state based on a reasonable per capita allocation. That is it. I hope that our legal experts in the Bar Council can throw some light on this matter. Over to you Bar Council;.

  2. #2 by shambles on Tuesday, 17 November 2009 - 8:08 pm

    If Kelantan under BN, sure will get royalty. If under PR….wang ehsan la.

    Double standard bigots.

  3. #3 by johnnypok on Tuesday, 17 November 2009 - 8:40 pm

    Kelantan should pull out of Malaysia and become an independent state/country.

  4. #4 by vsp on Tuesday, 17 November 2009 - 9:10 pm

    Nazri says “whatever it is, I insist that Kelantan will not get royalty as oil is extracted beyond its waters.”

    If the oil that Petronas is extracting is not within Kelantan’s economic zone, then why the hell is Petronas encroaching in a zone that does not belong to any state in Malaysia. So give back the area to the Thai because Najib and Nazri have admitted that the zone does not belong to Malaysia (Kelantan).

    Now to the Thais, send out your gunboats and blast away at the pirates that are encroaching in your waters and stealing your valuable resources. The world will applause your actions to defend your territories.

  5. #5 by OrangRojak on Tuesday, 17 November 2009 - 10:40 pm

    …so I copied and pasted your Q&A quote from your previous article into Google translate and it mangled the important bit:

    whether acquired or in waters outside state waters

    Since we’re arguing in English, anybody care to give an understandable version in English? If he really said “or acquired in waters outside state waters’, I would have expected the lawyers of the day to have gone crazy. It’s so vague (unless it’s purely an issue with translation) as to be meaningless. There’s an awful lot of water “outside state waters”!

  6. #6 by HARAPAN MALAYSIA on Tuesday, 17 November 2009 - 11:03 pm

    Our Big Boss said :
    This year no ” Right For Any-Bonuses”..!
    kerana Syarikat tak dapat Untung…malah rugi mendadak…akibat bankers-bankers dunia buat hal..!
    Yah.. memang betul “TAk RIGHT” dapat bonus..!
    Tapi nasib baik dapat “ANG-POW” bagi semua..!

    Next year janji for “Promised-Bonuses”..kalau
    Syarikat dapat Untung kembali…..seperti dulu-dulu-dulu….!
    Fikir-fikir balik…then memang betul jugak..”Promised-Bonuses”..sabar-kerja-tunggulah-dulu
    kerana Big-Boss memang Betul-Betul nak tunaikan “PROMISE”..Harap-harap bankers-bankers tak buat hal lagi masa tu….!

    Bila balik tanya Bapak..;
    Bapak kata :
    Walhai..You Big-Boss..memang handal macam dulu bapak punya..Big-Boss..boleh buat apa sahaja..! You sendiri kena pandai-pandai kerjalah…!Jangan sampai kena pergi “Selat Melaka menolak ombak…….!

  7. #7 by ENDANGERED HORNBILL on Wednesday, 18 November 2009 - 12:05 am

    Nazri’s other name is ‘Parakeet’. Sure, parrots mimics and do not have a mind of their own.

  8. #8 by frankyapp on Wednesday, 18 November 2009 - 12:47 am

    It’s simple thinking,Kelantan does not deserve oil royalty because it’s in the opposition hand.

  9. #9 by Bigjoe on Wednesday, 18 November 2009 - 8:24 am

    The question before is this: Why do Nazri get away with such lame excuses?

    Do Malaysian as a society not care for rule of law, strong institutions? Or is it because majority do not understand? Or is it because racism is such a big part of so many that political perversion can run amok? Its likely all the above are true to some degree.

    But it does not mean it will always be true. Nor does it mean it cannot be changed. As cynical as I am about most people’s ability, I also do not underestimated most people self-respect, pride and dignity. And what the likes of Nazri does is insulting to the people’s self-respect, pride and dignity. Do that often enough even sublimally, and people will react in ways unimaginable.

    Right now the people of Kelantan are feeling insulted. Nik Aziz could be a dead corpse and he would still be able to be elected as MB of Kelantan given the insult being hurled at them now.

    The issue is what are PAS and Kelantanese going to do with such insults? The Kelantanese have a huge diaspora in the rest of Malaysia, they will react strongly particularly in Terengganu.

    I say Terengganu can be captured by PAS if PR play their cards right.

  10. #10 by undertaker888 on Wednesday, 18 November 2009 - 8:55 am

    //whether acquired or in waters outside state waters…

    so, pay up!! nothing to argue. if NEP-assisted nazri wants to draw up another draft stating over 3 nautical miles, then it will be on different grounds and conditions. clown nazri cannot accept and reject parts of the agreement whenever he likes or doesn’t like.

    stupid clown. i am no lawyer but this is just plain logic. their [email protected] are demonstrated everyday in your face.

  11. #11 by taiking on Wednesday, 18 November 2009 - 9:05 am

    “The agreement was made as a promise so that future administrations will respect it. It is a promise but not a right and his son, Prime Minister Datuk Seri Najib Razak, is respecting this promise by giving goodwill payment to Kelantan,” Nazri told the Dewan Rakyat.


    Wot the phark is he saying?

    Johnny English, when stricken with super strength muscle relaxant, could certainly speak better gibberish.

  12. #12 by tenaciousB on Wednesday, 18 November 2009 - 3:32 pm

    Nazri’s sex scandal what happened to that??

    once again we pay taxes for these buffoons to spend on women,fast cars and alcohol. Not Fair i tell you not fair!

  13. #13 by katdog on Wednesday, 18 November 2009 - 8:48 pm

    A quick search of the Malaysian constitution reveals no such provision stating that the federation ‘owned’ seabeds more than 3 nautical miles from shore.

    The fact that it is not specified in the constitution probably suggests that territorial control of seabeds was never specifically transferred to the federal level upon formation of the federation. It was either never considered or never intended to be transfered. Either way, it still therefore reasonable to assume that that the state retains its rights over the seabed.

    If there is to be any dispute over sovereignty, it would be between neighbouring states such as Kelantan and Terrengganu. It is therefore strange for the federation to claim seabeds more than 3 nautical miles as federal territory.

    The federation may have jurisdiction on regulating transportation and fisheries etc. but i don’t believe it was ever conferred ownership of seabed territories.

    This whole 3 nautical miles thing is a huge pile of BS. I hope Malaysians are smart enough not to fall for such blatant attempts at misdirection.

  14. #14 by katdog on Wednesday, 18 November 2009 - 8:57 pm

    Plus the fact that Sabah and Sarawak are still paid oil royalties despite that much of their petroleum being located more than 3 nautical miles offshore ought to be plain enough that this has nothing to do with the law or the constitution but purely politics.

    UMNO is marginalizing the Kelantan Malays by refusing to give them what is rightfully theirs. Instead UMNO decides to give ‘donations’ when it is not even their money to begin with.

    What BS.

  15. #15 by samiyeh on Thursday, 19 November 2009 - 5:33 pm

    Sorry for out of topic but I thnk it is related.Last Sunday Star there was a full page
    notice where a list of Petronas students appeared. All did pay the thier scholarship money. I believe they need this oil royalties to off set the A/C.
    Foot note; The list of names showed 122 Malays, 2 Chinese and 1 Indian.

  16. #16 by samiyeh on Thursday, 19 November 2009 - 5:36 pm

    Sorry It should read all did not pay.3

You must be logged in to post a comment.