This was during the committee stage debate on the Prime Minister’s Department on the 2010 budget in Parliament.
On 3rd November, while replying during question time, Najib told Parliament that from a legal aspect, states such as Kelantan and Trengganu are not entitled to oil royalties for petroleum produced “off-shore” – as they are only entitled to oil royalties if the petroleum is drilled from its water.
Najib said:
“The offshore oil operations in their waters are defined as an area not more than three nautical miles, which is measured starting from the low watermark or the shoreline of the state.
“Currently, there is no oil production in the waters of Kelantan or Terengganu. Because of that, from the legal standpoint, Kelantan does not have a right to demand oil royalties, the same as Terengganu”.
This was in clear contradiction to the answer given by Najib’s father, Tun Razak when he replied to my question as the second Prime Minister in Parliament on the same issue 34 years ago in 1975.
This is the Q & A from Parliament Hansard of November 12, 1975:
Tuan Lim Kit Siang minta Perdana Menteri menyatakan samada semua negeri di Semenanjung Malaysia, Sarawak dan Sabah telah menandatangani perjanjian dengan Petronas untuk mencarigali minyak di sepanjang pantai dan samada perjanjian tersebut mengandungi apa-apa syarat dan kepentingan bersama. Nyatakan juga keuntungan bersama yang akan diterima oleh tiap-tiap negeri.
Perdana Menteri (Tun Razak): Tuan Yang di-Pertua, semua negeri di Malaysia, melainkan Sabah dan Selangor, telah menandatangani perjanjian dengan Petronas sebagaimana yang dikehendaki oleh Akta Kemajuan Petrolium, 1974. Saya diberitahu Kerajaan Negeri Selangor pun telah bersetuju menandatangani perjanjian ini. Mengikut Perjanjian itu, tiap-tiap negeri akan menerima 5% daripada nilai petrolium yang dijumpai dan diperolehi di negeri masing-masing samada yang diperolehi dalam kawasan perairan atau di luar perairan negeri tersebut, yang dijual oleh Petronas ataupun ejensi-ejensi ataupun konraktor-kontraktornya.
I called on the son and the sixth Prime Minister to keep to the commitment by the father and the second Prime Minister that Kelantan and Trengganu are entititled to 5% oil royalty for petroleum “whether onshore or offshore” as stipulated in the Petroleum Development Act 1974 (one of whose architects is Tengku Razaleigh Hamzah who had rightly spoken up on the legal rights of Kelantan and Terengganu to 5% oil royalty for petroleum produced offshore and not as mere “wang ehsan”).
Otherwise, Najib’s 1Malaysia would be sheer mockery if the legal rights and status of states to oil royalty is politicized to depend on whether Umno/Barisan Nasional controls the state government, as happened to Terengganu and Kelantan.
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