Absurd to suggest capex to be spent by Petronas be borne by Petros, says S’wak lawmaker

KUCHING (Nov 30): Batu Kitang assemblyman Dato Lo Khere Chiang found it absurd for an analyst to suggest that capital expenditure that is supposed to be spent by Petroliam Nasional Berhad (Petronas) be borne by Petroleum Sarawak Berhad (Petros).

Lo even likened such suggestions as “inviting oneself to a friend’s house, sitting down, finishing all the food on the table and then asking the friend to pay for the cost of cooking that meal”.

He was referring to a quote reported in FMT: “Whatever capital expenditure that is supposed to be spent by Petronas must then be borne by Petros” by an analyst on condition of anonymity.

“What absurdity is this?” Lo asked.

Lo came forward amidst public debate on whether Petros should now be the sole aggregator for oil and gas extracted in Sarawak after Petronas had done so since 1974.

“Having deprived Sarawak of a reasonable 30 per cent return of all oil extracted from Sarawak, it is absurd and unfair to ask Petros to bear the capital expenditure incurred by Petronas over the years of exploitation of Sarawak’s oil and gas,” said Lo in a press statement yesterday when reacting to an FMT article entitled ‘Sarawak and Malaysia can’t afford escalating O&G disputes’.

The article also quoted other experts who claimed that making Sarawak the sole aggregator of natural gas will be costly for the state and for Petronas.

If Exxonmobil can give Guyana 40 per cent of all oil extracted, Petronas should do the same for Sarawak, Lo argued, pointing out that the five per cent that Sarawak is receiving from Petronas annually is grossly unfair to Sarawak.

“It is erroneous for the (FMT) writer to say that billions in investment in its oil and gas (O&G) infrastructure, currently underwritten by national oil corporation Petronas, is likely to dry up.

“Where have all the billions siphoned from Sarawak gone to over the last 60 years? Why is Petronas excused from having to declare its profits, and how has the country’s most valuable asset been spent? The citizens of this country have the right to know,” Lo said.

“It is even more erroneous to say that even if Petros is appointed the oil and gas aggregator for the state it is unlikely to be able to strike as fair a bargain as Petronas can in its dealings with the big players in the industry.

“How does the writer explain the feeble five per cent that Sarawak has been receiving from Petronas over the last 60 years?” Lo asked.

“Surely Petros will receive a far better deal than the present five per cent from Petronas by teaming with any other industry player,” he said.

Making comparisons, Lo pointed out that Guyana was a very poor country until its first significant oil discovery in May 2015.

The country’s leaders exploited their godsend resources and teamed up with Exxonmobil, who gave Guyana 40 per cent of all that has been extracted from the ground to Guyana.

Exxonmobil’s entitlement was 60 per cent of all the oil resources extracted, and Exxonmobil was responsible for all the capital expenditure incurred in the operation and extraction, including sales of oil resources in a matter of nine years.

Consequently, Lo said, Guyana has become the world’s fastest growing economy and one of the richest nations in the world, with a GDP reaching US$23 billion.

“Countries who have teamed up with Exxonmobil to capitalise on their oil rich resources include the United States of America and China,” Lo said.

Whereas Malaya (Peninsular Malaysia), he added, has been siphoning RM80 billion on average, annually, worth of oil from Sarawak over the past 60 years but Sarawak was only given back a miserable five per cent of the RM80 billion worth of oil extracted.

Even with 95 per cent of Sarawak’s wealth siphoned off to Malaya, Malaysia today owes an external debt of RM1.3 Trillion while Sarawak’s reserves is a healthy and proud RM40 billion, the highest among all the states in the whole of Malaysia, he said.

Lo was also disappointed with veteran politician Tengku Razaleigh Hamzah for claiming that only a national oil company such as Petronas, which has the backing of the entire federation, will be able to avoid being strong-armed by global corporations.

“Going by this logic, Sarawak should (then) be receiving as much as what Guyana is receiving from Exxonmobil,” Lo argued.

“Similarly, Sarawak should be receiving as much as what neighbouring Brunei is receiving from Shell for exploiting her oil resources.

“It is heartening to see our Premier (Datuk Patinggi Tan Sri Abang Johari Tun Openg) going through a constitutional process to regain Sarawak’s oil and gas rights. Petros must continue to fight for Sarawak’s rights under the Malaysia Agreement of 1963 (MA63), the Sarawak Land Code, and the Sarawak (Alteration of Boundaries) Order in Council 1954. Through all these, the legality of Sarawak’s sovereignty over its oil and gas resources is clearly unquestionable,” he stressed.

“Sarawakians must all come together to support our Premier Abang Johari and the GPS government in our quest to regain our oil and gas rights,” said Lo.