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.”