Ku Li says no 3-mile limit for offshore oil royalty - Anil Netto

Refuting a government ad blitz, Tengku Razaleigh Hamzah insists that oil-producing states are entitled to a 5 per cent payment on all oil extracted, whether onshore or offshore.

There is no such thing as a 3-nautical mile limit, he writes in his latest blog entry.

The Information Ministry’s full page advertisements in the major Malay newspapers had argued that Kelantan has no right to oil payments under the Petroleum Development Act because its oil resources fall outside the 3-nautical mile limit that delimits state versus federal jurisdictions.

Razaleigh counters:

The advertisement fails to point out that almost all the oil found in Malaysia is located more than 3 nautical miles offshore, and Petronas has nevertheless been making oil payments to the states. By the argument deployed in the advertisement, Terengganu, Sabah and Sarawak too are not entitled to the “cash payments” of 5% of profit oil (commonly and a little inaccurately referred to as “oil royalties”). Everything is at the arbitrary behest of the Federal Government.