Mustapa says Kelantan oil from JDA, no royalty

Nik Aziz may sue the government to get oil royalty payments for Kelantan. — file pic

KOTA BAHARU, Dec 20 — The federal government cannot determine the amount and method of giving compassionate payment (wang ehsan) to Kelantan until oil output in the state has been determined by Petronas.

International Trade and Industry Minister, Datuk Seri Mustapa Mohamed, said what was certain was that the amount would not be the same as that given to Terengganu, Sabah dan Sarawak.

This, he said, was because half the country’s petroleum output was from the three states.

“Till now the government has not been able determine the allocation of compassionate money for Kelantan,” Mustapa told reporters after speaking at a gathering with federal service staff at Pusat Teknologi Pendidikan, Pengkalan Chepa, here today.

The Kelantan Umno liaison committee chairman said although there were various assumptions made about compassionate money and oil and gas royalty in Kelantan the amount and method of payment will only be determined after Petronas’ study.

Prime Minister Datuk Seri Mohd Najib Razak on Nov 4 said Kelantan will receive compassionate payment from the federal government in place of oil royalty beginning next year.

However, Kelantan Mentri Besar, Datuk Nik Abdul Aziz Nik Mat, wants the federal government to fulfil the royalty demand and may take the matter to court if the federal government does not comply.

Commenting on the issue, Mustapa said: “For sure the amount will not be big, not like Terengganu, Sabah and Sarawak, as Kelantan does not qualify for the royalty as the oil exploration area was located in the Malaysia Thailand Joint Development Authority (MTJDA) area between Malaysia and Thailand where production is shared 50-50.”

On the willingness of former Finance Minister, Tengku Razaleigh Hamzah, to cooperate with the Kelantan state government on the royalty demand, he said he was of the opinion that everyone had a right to give their view.

“The federal government’s stand will be based on Petronas’ study. According to Malaysian law one qualifies for royalty if the petroleum was produced within three nautical miles of the coastal line. This is the government’s stand subject to Malaysian laws and we have ways to handle the problem,” he said.

Meanwhile, deputy chairman of the Kelantan Umno liaison committee, Datuk Dr Awang Adek Hussin, said the action by Opposition leader, Datuk Seri Anwar Ibrahim, to table a private member’s bill on the royalty issue showed that the opposition was not confident the royalty demand would be in their favour according to the Petronas Act 1974.

“So we must accept the fact that actually Kelantan according to law does not qualify for the royalty so that is why he wants to table the amendment bill for the act,” he said. — Bernama