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Thursday, August 21, 2014

‘Nothing to be proud of in Petronas’ 10pct offer’


Sarawak PKR today warned Sarawak Chief Minister Adenan Satem that he should not be too happy to accept the offer of 10 percent equity in the Malaysia Liquefied Natural Gas Fourth Plant (MLNG 4) as the state government could be hoodwinked by Petronas.

“The 10 percent is merely an investment, but is blown out to hoodwink the state government and the general Sarawakian public into believing that Petronas is being generous to Sarawak.

“Sarawak should not settle for less than what the Sarawakians deserved, and the minute we settle for less, we get even lesser,” said Sarawak PKR vice-chairperson See Chee How (left) when commenting on Adenan’s statement that Petronas is offering Sarawak 10 percent in MLNG 4.

The chief minister had said that the offer was a result of the state’s negotiations with Petronas to increase its participation in the oil and gas industry and request for oil royalty increase from the present five percent to 20 percent.

See, who is the Batu Lintang state assemblyperson, said: “For the first three MLNG plants, the state has equity holdings of five percent in the first plant, 10 percent each in the second and third plants (MLNG 2 and MLNG 3).

“Now that we are offered 10 percent equity holding in the new fourth plant (MLNG 4), it merely maintains our equity holding in MLNG plants as we have had in 1992 (in MLNG 2).

“And, these are our investments. In 2003, Sarawak had paid and invested RM30 million for the 5 percent equity in MLNG first plant, RM40 million in 1992 for 10 percent equity in MLNG 2 and RM40 million in 1995 for 10 percent equity in MLNG 3.

“Surely, the 10 percent equity in MLNG 4 will not be given to Sarawak free of charge,” said See.

The PKR leader said that the chief minister and the state government should reveal the earnings through the state’s equity holdings in Malaysia Liquefied Natural Gas Sdn Bhd (MLNG) each year, from 1995.

“I would suggest that we have the same equity holding to these MLNG plants as Petronas as of now, and to eventually replace Petronas in equity holdings for future new MLNG plants.

“As of now, Petronas owns 90 percent equity in the MLNG first plant, 60 percent equity each in MLNG 2 and MLNG 3.

‘State’s equity returns were merely RM750mil’

“In 2012, the state has equity holdings in 47 unlisted companies, including the three MLNG. Collectively, from the investments in all these 47 companies, the returns were merely RM750 million.”

See pointed out that the state government and the public should not be hoodwinked into believing that the federal government and Petronas are generous and that they are on the way to satisfy the state’s demand for 20 percent royalty rights to the oil and gas produced from the state, which the state rightfully deserved.

“In fact, they have given us nothing yet,” See said.

He said that as at present, the five percent royalty from oil and gas is estimated to give the state RM1.666 billion and a 20 percent royalty will give Sarawak RM6.664 billion for this year alone.

“Imagine what we can do with that state revenue of RM6.664 billion from the extraction and export of petroleum and gas from Sarawak. And this is not including the excise and import duties from the petroleum products which is estimated at RM120 million this year, at the rate of five percent royalty.

“Therefore, the chief minister and the state government must be reminded that we should be asking for the RM5.358 billion that we are being shortchanged for this year and bear that royalty amount in mind when negotiating with the federal government and Petronas.

“As we are paying for the 10 percent equity holding and investment in MLNG 4 which will only yield results after 2017, this offer from Petronas actually does not go any way to make up for the RM5.358 billion that we are being shortchanged,” said See.

Giving the state government a gentle reminder See said: “If we are willing to settle for less than what we deserved, we will get less.

“The minute we settle for less, we get even lesser,” he stressed.

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