SABAH will formulate a new law to regulate the state’s natural resources in bid to increase revenue if the Pakatan Harapan federal government fails to deliver on its pledges.

Sabah Chief Minister Shafie Apdal today said new legislation would be enacted to, among others, regulate offshore drilling activities, which the state currently has no jurisdiction over.

Shafie said Sabah already had its own oil firm and was, therefore, directly involved in upstream oil and gas activities.

“We will have an enactment on natural resources. For offshore drilling, at present, we don’t have any kind of jurisdiction.

“But we will try our best to make sure all the revenue from oil and gas derived from the state will increase.

“We need to strengthen our position by enacting this legislation and make sure that what is due to us can be realised,” he said during the state assembly sitting’s question and answer session.

He was responding to questions posed by Tambunan assemblyman Jeffrey Kitingan, Masidi Manjun (Karanaan) and Joniston Bangkuai (Kiulu) over measures the state government would take if it could not acquire the 20% oil royalty as promised by the federal government.

Sabah’s move is similar to its neighbour Sarawak’s, which formed Petros to regulate the oil and gas industry in accordance with the Oil and Mining Ordinance, Sarawak Land Code and Gas Distribution Ordinance 2016.

No oil company, including national oil giant Petronas, is allowed to do business in the state without obtaining a permit from Petros.

Under Pakatan’s new deal manifesto for Sabah and Sarawak, it promised to increase the state oil royalty from 5% to 20% and 50% sharing of revenue derived from the states. 

Shafie said, however, that the main bone of contention was not in the formula itself, but whether the ratio is based on profit or gross production.

Shafie said the state had formed its own committee to look into the calculation.

“I want to make it clear that Sabah wants 5%+15%, as this is in our manifesto.

“Such issues should have been fought for earlier but since nothing was done before, we now want to make sure we get the 20% oil royalty,” said Shafie, adding that the government expected to receive around RM1.3 billion this year.

He said he would meet Petronas president Wan Zulkiflee Wan Ariffin next week and raise the 20% oil royalty issue, as well as inquire as to why it has not been paid from as far back as 1975. – August 14, 2018.