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Saturday, 27 March 2010

By Stephanie Sta Maria - Free Malaysia Today

KUALA LUMPUR: The federal government had failed to honor the original intention of the oil agreement by sticking its fingers into Petronas' coffers, said PKR supreme council member Zaid Ibrahim.

Political differences and legal technicalities aside, Zaid said this is the root cause of the dispute concerning oil royalty.

In a recent exclusive interview with FMT, the former law minister noted that the agreement inked between Petronas, the federal government and the state governments stipulated the percentage of revenue that each party would receive from oil found in any of the 13 states.

Petronas would be awarded 90 percent, while the federal and respective state governments would receive five percent each.

Zaid explained that Petronas was given the lion's share of the revenue so that the state-owned company could invest the money for the nation's future generations.

“Yet the federal government dipped into its coffers to build the Twin Towers and Putrajaya.

“And in helping itself to more than its allotted five percent, the government dishonoured the intention of the oil agreement,” he added.

This, Zaid stressed, was the crux of the dispute.

“Not the stupid, irrelevant argument about territorial waters, which was not included in the agreement and had no relevance to the ownership of oil,” he added.

Zaid said the current government was attempting to find flaws in the agreement in order to justify its actions, “but none of it holds water when you look at history”.

“The previous governments paid Terengganu for 22 years not because it misunderstood the law but because it honoured the intention of the agreement.”

The former Umno leader also slammed the government for keeping a tight lid on the agreement, and urged it to disclose the document.

“But I doubt it would. Because doing so would mean exposing its abuse of Petronas,” he said.

'Dr M blatantly abused Petronas'

Meanwhile, Zaid also lambasted former premier Dr Mahathir Mohamad for allegedly abusing the Petroleum Development Act (PDA) and manipulating its original intention to suit his plans.


Our economy is tottering and all we've got is Petronas. Once we lose it, we are finished. And we would lose Petronas if nothing changes.

“When (the country's second prime minister) Tun (Abdul) Razak created Petronas, he wanted to protect it from internal corruption. Therefore, he crafted the PDA in a way that gave him full control of Petronas.

“But Mahathir saw this as an opportunity to use Petronas for other means without being found out. He blatantly abused the PDA's noble intention and this is unacceptable,” he said.

“The government now runs everything in private as if it's their own money. It could create 20 funds and withdraw RM20 billion tomorrow and no one would know until all the money is gone,” he added.

According to Zaid, it is for this reason alone that the government would never utter a word on the supposed 'big oil find' by Petronas. (The national oil company earlier this week denied making any big oil find)

He claimed that the government did not want to reveal Petronas' revenue so that no one would know how much of that revenue was being squandered.

Zaid also painted a bleak picture of the country's future should the current government continue running Petronas.

Although economists had given Petronas another 20-year shelf-life, he however felt that it was a very generous forecast.

“This is very serious. Our economy is tottering and all we've got is Petronas. Once we lose it, we are finished. And we would lose Petronas if nothing changes,” he warned.

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