Tengku Razaleigh’s official weblog
The Government has now responded to Kelantan’s claim to a portion of the profits derived from petroleum resources extracted offshore by PETRONAS.
Its response violates the letter and the intent of a solemn agreement signed between each State Government and PETRONAS under the Petroleum Development Act.
That agreement is made out in language simple enough for a schoolboy to understand, in both Bahasa Malaysia and English.
The Constitutional rights of the people of Kelantan are denied. However this has implications far beyond Kelantan:
1) It negates an agreement signed between the Kelantan Government and PETRONAS. By implication, it negates identical agreements signed by PETRONAS with every other state and deprives the people of their constitutional rights.
2) The Government’s refusal to recognize a straightforward contractual obligation on PETRONAS’s part puts a question mark over the status of oil payments due to the other oil-producing states. The States’ rights to 5% of profit derived from the extraction of any petroleum resources is based on a quid pro quo according to which the States vested entirely and in perpetuity all their rights and claims to petroleum resources to PETRONAS. In return for this PETRONAS is legally bound to pay the states the 5% directly
3) If PETRONAS no longer recognises its legal obligation to pay the States what is due to them under the Petroleum Development Act, the States, and in particular Sabah and Sarawak, will now wonder if the corresponding Vesting Deed by which they vested all their rights in their petroleum resources to PETRONAS remains in force.