Oil royalty calculated based on gross production – Lina Soo

KUCHING: The President of State Reform Party Sarawak (STAR) Lina Soo has expressed her disappointment over Prime Minister Tun Dr Mahathir Mohamad’s announcement that Sarawak and Sabah will get 20 per cent profit but not the royalty from oil and gas resources.

In a press statement issued here yesterday, she added that Dr Mahathir’s statement was ambiguous by saying that 20 per cent royalty will be paid but 20 per cent of it would be based on profit.

“The convention to calculate oil royalty is based upon the percentage of gross production and is free and clear of all costs,” she said.

Stunned to learn that the offer was 20 per cent of the profit which would factor in production costs, operational expenditure and taxes, she said, “Has the PM moved the goalpost so as to be seen as fulfilling its election promise, yet denying Sarawak voters the real value of 20 per cent royalty by changing the benchmark from gross production to profit?”

She also said that it was as if the Pakatan Harapan (PH) government was trying to avoid the payment to Sarawak of the true value of 20 per cent royalty by creative accounting as it may turn out that 20 per cent of profit could be lower that 5 per cent of gross production.

She added that the announcement with the headline of 20 per cent could be a distraction to divert the focus from the real issue of ownership over oil and gas found in Sarawak.

“Sarawak is one of the oil-producing states, the State government has to resolve the rights and ownership over oil and gas found on its soil and territorial waters through constitutional process in the State Legislative Assembly (DUN), failing which the elected lawmakers would have failed in their duty to fight for and protect Sarawak’s rights, resources and sovereignty,” she said.