SARAWAK’s quarrels with Petronas, over ownership of oil and gas resources in the state, and with Putrajaya, over the oil payment mechanism, could hurt Pakatan Harapan in the state elections if the disputes are not resolved ahead of the 2021 polls, say political analysts.

Universiti Kebangsaan Malaysia’s Asian Studies Centre head Faisal S. Hazis said to resolve the state’s catalogue of grievances, the federal government needed to go “beyond just addressing the oil royalty”.

Failure to mollify Sarawak, Faisal said, could scuttle the gains PH had made in the state in the May general election.

Sarawak’s unhappiness at oil payment stemmed from Economic Affairs Minister Mohamed Azmin Ali’s recent announcement that the state’s 20% oil royalty would now be calculated based on the net profit instead of gross production as has been practised for 44 years. It is a sharp veer from PH’s promise in its election manifesto.

The PH manifesto also offers to return 50% of all federal taxes collected in the state and full autonomy in education and healthcare.

The U-turn on oil payment has led to Sarawakians accusing PH of being no different from the ousted Barisan Nasional government in the plunder of the state’s resources..

Faisal told The Malaysian Insight PH had to address Sarawak’s considerable unhappiness at being marginalised and shortchanged beyond the issues of oil royalties and decentralisation.”

He said the PH government had also to address the sorry state of rural schools, the lack of infrastructure, and inter- and intra-ethnic disparity.

“PH has to address these concerns as it is crucial for them to build on the support that they gained in GE14.”

University of Tasmania’s Asia Institute director James Chin said how much PH’s electoral chances were hurt “depends on the final calculation (of how much it pays Sarawak for oil)”.

Chin said the formula to calculate the payment quantum would be based on international production sharing practices “so (there is) not much room to manoeuvre”.

Whichever formula the parties finally agreed on, he said, “for sure GPS will be unhappy”, in reference to the Sarawak ruling coalition, Gabungan Parti Sarawak.

“The nationalists will not be happy anyway as they want 100% of oil and gas returned to Sarawak.

A former political secretary to the chief minister disagreed that PH’s rows with Sarawak would hurt the government in the state elections.

“Do you think this row over ownership and oil payments, whether royalty or profit, is going to hurt PH and their chances in the coming state election if it’s not resolved quickly?,”

“No, I don’t think so.”

He said PH would instead be strengthened.

He said the Pemakai Menoa and Pulau Galau native customary land rights and election candidates were the more pressing issues.

“The GPS coalition will collapse and they will contest under their respective party banner.” – July 27, 2018.