Musa to Make a Slick Move for Sabah Oil

Posted: April 22, 2014 in Lim Guan Eng, Malaysia, Musa Aman, Najib Tun Razak, North Borneo, Petronas, Sabah Politics, Tun Dr Lim Chong Eu
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Politics aside, you could probably count Musa Aman as a rather popular personality. No other state’s population rallies around its Chief Minister as does Sabah for Musa Aman. Sabahans are proud of the national appeal he has, and the bad press that he was given in the early days of his chiefministership does not really matter to them. We must look at why that is.

The first thing we observe is his charisma. He is the most talented politician of his generation, if by talent we mean the ability to attract people to him. The connection he has with his audience is almost unmatched. He is one of the three best communicators in Malaysia, the other two being Anwar Ibrahim and Mat Sabu.

All three men has also been known to combine humour, drama and colloquial speak. All three, and not accidentally either, are entertainers. Performers of high calibre. Musa is very comfortable with large crowds. His quality can only by hinted at to those who don’t understand and speak Sabahan Malay. He speaks Sabahan Malay, touched by the accent of neither the rough parts of Keningau and Beaufort, nor the urban slang of Kota Kinabalu.

The second thing is that he is not a race/religious-based leader. Like Lim Guan Eng and Azmin Ali and unlike Tan Sri Adenan Satem, and Shafie Apdal, or even Salleh Said Keruak, Musa’s electoral popularity does not come from belonging to a community. Musa is a Dusun/Pathan from the Gunsanad family originating from the Sundang, the Sodomon family in Keningau and the Aman family from Beaufort. It is not numerically significant in Sabah in electoral terms, and not a vote-bank he can rely on. In any case he neither makes reference to it, nor does he have the reputation for promoting fellow Dusuns or Muslims. Despite his Dusun background, he has been able to rally around him the votaries of Muslims, which in Sabah are mainly the majority.

The third thing is that he has it together organisationally. His attention to details can be compared to the Former Penang Chief Minister Tun Dr Lim Chong Eu, who was as meticulous in running his everyday administration as Musa is. I have never been admitted to Musa’s office for an appointment a single minute later than scheduled. If he says he will meet you at 8, it will be exactly then when an assistant comes to fetch you from the waiting room.

His fourth quality is the ability to judge which events are likely to be popular, and jargon that will and can capture the imagination. This is an important political talent in a nation where slogans are used everywhere. On admittedly a much smaller scale, in this sense he is like Anwar Ibrahim, who through his career coined words and phrases that did not exist before, such as “Professor Kangkung” and “Pandi Kutti”. Musa’s contribution are things like “Halatuju Sabah”, and “Vibrant Borneo”. He can encapsulate much meaning into a couple of throwaway words. And he can get the media to use them, a sign of success. And it is true that there have been other great organisers who became chief minister of Sabah, like Tan Sri Harris Salleh.

Hence, it is rare that any politician is really able to embody all four elements –charisma, broad appeal, organisational ability, and political talent.

Even the most contentious issue, the 5% oil royalty, which has been a source of unhappiness to every Sabahan since the Petroleum Development Act of 1974 and how Musa a Sabahan views it, is so profound. Musa is certainly aware that it is time to review the oil revenue-or profit-sharing agreement between Sabah, the federal government and Petronas, the national oil company. Presently, the federal government is the sole shareholder of Petronas.

The Petroleum Development Act of 1974 came into play after Petronas signed the first production sharing contracts with Shell, Exxon and other foreign oil companies in 1976. Under a complex mechanism, Petronas sets aside 10% of gross revenue from oil and gas production for cash payments to the federal government and oil-producing states. Out of this money, the federal takes half and the states keep the balance. The Federal Government gets a flat annual dividend of RM 28 billion. Last year it got 30 billion ringgit out of a profit of RM 63 billion. Sabah expects about only RM 800 million in petroleum royalties this year.

But, it receives about four times more than its 5% oil royalty from the federal government for its social and infrastructure development under each succeeding five-year Malaysia plan. Federal grants are estimated at about RM 350 million. The state has got slightly more than RM 10 billion to carry out 424 projects under the first phase of a rolling plan of the 10th Malaysia plan which started last year.

So hear this very carefully, Sabah contributes a little more than a quarter of Malaysia’s crude oil production of about 635,000 barrels a day. Petronas’ profits over the years from Sabah’s oil and gas could be in billions up to now. So, it is not late for The Federal Government to consider more participation of Sabah State Government in Petronas itself which is raking the billions from Sabah. Converting Sabah’s share of oil and gas revenue into equity with Petronas will be very fair. Start with 20%, let Sabah government have 20% ownership in Petronas.

This does not in anyway cause any financial burden to the Federal Government, Petronas will just have to issue share certificates to Sabah State Government and there is no cash transaction. And every year instead of “cash payments” or “royalties”, Sabah would receive dividends as shareholders with Petronas. Besides, Petronas continues to be profitable and is the most diversified company having investments in almost every corner of this world and Petronas is the only company in Malaysia which is a Fortune 500 company. Last year, the conglomerate paid RM 5.4 billion in “petroleum proceeds” to the federal and state governments.

Giving Sabah a stake in Petronas would surely help their integration in Malaysia. After almost 50 years, it is still not too late to start. This would certainly help to diminish Sabahans’ sense of loss of their natural resources.

Comments
  1. http://www.nst.com.my/news/2016/08/168790/pm-agrees-sabah-having-new-petronas-board-member

    PM agrees to Sabah having new Petronas board member
    By Roy Goh – 28 August 2016

    KUDAT: Prime Minister Datuk Seri Najib Razak has agreed for Sabah to have a new board member in national oil and gas company Petronas. Chief Minister Datuk Seri Musa Aman said the Umno president approved his proposal when he forwarded it earlier. “Our Finance Ministry’s permanent secretary will be appointed as a director in Petronas,” he said in his speech in the opening of the Zone 1 Umno division meetings to be launched by Najib here. “This is how the party president listen to our needs as Prime Minister of this country and delivers what he promises,” he said to the gathering, which involves delegates from the Kudat, Kota Marudu, Kota Belud and Tuaran divisions.

    Read More : http://www.nst.com.my/news/2016/08/168790/pm-agrees-sabah-having-new-petronas-board-member

    Like

  2. http://www.freemalaysiatoday.com/category/nation/2014/04/23/musa-eyes-petronas-shares/
    Musa eyes Petronas shares
    FMT Staff
    | April 23, 2014

    It is understood that Sarawak’s Taib Mahmud-mentored regime is also seeking to swap royalties for a stake in the Fortune 500 company.

    Najib Musa Aman Taib MahmudKOTA KINABALU: Chief Minister Musa Aman wants a stake in Petronas instead of oil royalties.

    A source close to Musa claimed he has “sent out feelers” to Putrajaya and is waiting to see the federal government’s receptiveness to the idea.

    Musa, the source said, is aware of the need to seek a review of the current 5% oil royalty.

    But as a leader with a business background, he thinks it’s more profitable for Sabah if the state had a stake in the conglomerate, the source said.

    Petronas is a Fortune 500 company with diversified interests and investments around the world.

    Last year the conglomerate paid RM5.4 billion in petroleum proceeds to the federal and state governments.

    Sabah currently contributes a little over 25% of Malaysia’s crude oil production which is about 650,000 barrels a day.

    The federal government is presently the sole shareholder of Petronas.

    “He (Musa) wants to talk business. He wants shares in Petronas.

    “This is best time for Sabah, Sarawak to push (for more). (Prime Minister) Najib (Razak) is weak and needs us,” said the source.

    The move could see Sabah and Sarawak earning more in dividends than the 20% that Pakatan Rakyat has been promising to oil producing states if it comes into federal power.

    Taib’s move

    In KUCHING, meanwhile, it is the understood that the Taib Mahmud-mentored regime is also looking at the business angle, which probably explains Chief Minister Adenan Satem’s reticence on the issue.

    A PBB insider when asked texted: “same sentiment here”.

    “Taib’s agenda always to swap royalty for dividends, but KL wants full control.”

    It is understood that Putrajaya is alert to the Borneo states newfound ‘independence’.

    In the runup to the 13th general election, both state and federal opposition leaders had flogged the 5% oil royalty and the Malaysia Agreement 1963 saying the federal government was cheating Borneo and had failed to adhere to the terms of pact.

    The campaign earned the opposition 13 state seats in Sabah and 15 in Sarawak, an unprecedented feat.

    But despite winning just over 50% of the popularity votes nationwide, Pakatan failed to capture Putrajaya. BN won in the first-past-the-pole system practiced by the Election Commission.

    Meanwhile pro-Musa blogger, S Selvaraja when contacted said: “Musa is a businessman.

    “It makes business sense to convert Sabah’s oil and gas revenue into equity in Petronas.

    “Giving Sabah government 20% ownership in Petronas is not a financial burden on the federal government. There is no cash transaction.

    “Petronas will just have to issue share certificates to the state government.

    As a shareholder Sabah will then receive dividends instead of cash payments from Petronas.

    “It’s a fair deal,” said Selvarajah.

    For more on Sabah and Sarawak visit http://www.fmtborneoplus.com

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  3. Najib went to Miri and declared that he would consider Sarawak’s request for increased royalty. He didn’t mention Sabah, Kelantan and Terengganu.

    Before we rush into the question of increased royalty, we have to determine the constitutionality of the PDA and the oil agreement.

    The oil and gas in Sabah and Sarawak belongs to these nations.

    Petronas should be handed over to the Governments of Sabah and Sarawak.

    The Federal Government should also pay Sabah and Sarawak compensation, at a statutory eight per cent interest per annum compounded yearly, for all the oil and gas stolen from Sabah and Sarawak since 1976.

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  4. Anonymous says:

    How about Musa?

    Like

  5. Anonymous says:

    http://www.dailyexpress.com.my/news.cfm?NewsID=89376
    Daily Express April 26, 2014

    ‘Yes’ to Petronas stake move

    Kota Kinabalu: Several Chambers of Commerce and Industry in Sabah are all for suggestions that the State Government seek a stake in Petronas – including a permanent place on the Board – instead of endlessly clamouring for higher oil royalty but getting nowhere.

    They believe it is timely for Sabah to receive higher returns on its contribution to the country when its natural resources had been exploited for so long and developed.

    An online portal recently reported that Chief Minister Datuk Seri Musa Aman is contemplating seeking a stake for Sabah in the conglomerate in which the Federal Government is presently the sole shareholder.

    A source close to Musa claimed he had “sent out feelers” to Putrajaya and is waiting to see the Federal Government’s receptiveness to the idea.

    The source said Musa is aware of the clamour by both the Barisan Nasional components as well as the opposition for a review of the current five per cent oil royalty and thinks it is more profitable for Sabah if the State had a stake in the conglomerate which is a Fortune 500 company with diversified interests and investments around the world.

    Sabah currently contributes a little over 25 per cent of Malaysia’s crude oil production, which is about 650,000 barrels per day.

    The portal also reported that the move could see Sabah and Sarawak earning more in dividends than the 20 per cent that Pakatan Rakyat promised to oil producing states during the 12th general election if it formed the Federal Government.

    Malaysia Malay Chamber of Commerce (DPMMS) Sabah branch Chairman Datuk Awang Buhtaman Awang Mahmun said any move to get equity in Petronas is acceptable and is another option to asking for more oil royalties.

    He said he fully supports Musa’s move to address the hot issue in the State, if this was the case.

    Buhtaman, who is a successful businessman, said the amount of shares must be reasonable and mutually agreed by parties.

    “The shares given to Sabah should be based on our contributions to Petronas on the waters and mainland like the Sabah Oil and Gas Terminal (SOGT) in Kimanis, Papar, Sabah Ammonia Urea (Samur) project in Sipitang and the oil rigs in Sabah waters.

    “As for the amount of shares, I believe it is too early to state but under a normal business proposition or model, usually the business owners should get equity of 30 per cent while those that work on the assets will get 70 per cent shares.

    “So, for example, Sabah has the land and resources which makes us the owner and the other party like Petronas is getting bigger percentage as the conglomerate uses its capital to realise the projects and offshore exploration of oil and gas,” he said.

    On offshore oil exploration, he said the amount of shares must be based on anything historically under the territory of Sabah prior to the formation of Malaysia.

    Sabah Indian Chamber of Commerce and Industry (SICCI) President Dr Victor Suppiah, who also expressed full support, described Musa’s move as an intelligent approach and that it is timely to ask for a good deal from the Federal Government that benefits Sabah and the people.

    “We fully support the Chief Minister for his initiative in seeking a stake in Petronas and we truly thank him for his immediate action to address the matter for the people in Sabah.

    “In fact, I believe this should have been done a long time ago by previous leaders as the State has been giving so much contribution like providing lands and allowing the conglomerate to come in Sabah and carry out development works. But I guess better late than never (referring to Musa’s move),” he said.

    Dr Victor said it is also high time for the Federal Government to give higher returns to Sabah by advising Petronas to give a fair amount of shares to Sabah in order to get higher dividends.

    In fact, he said, giving some equity to Sabah would also mean rendering appreciation to the State Government after a long time.

    “Some in Sabah are not happy with what they are getting from the Federal Government which they perceived as small compared to what Sabah has given to them (Federal). So, by giving Sabah shares in Petronas it is a timely step to give higher returns to the State and people to enjoy a little bit more,” he said.

    KadazanDusun Chamber of Commerce and Industry (KCCI) President Bonny Blasius said he would only agree to getting shares in Petronas if the amount at stake is reasonable and profitable.

    “Making attempts to ask for a stake in Petronas is better than claiming for higher oil royalties because a lot of processes and consultations that need to go though like reviewing the Petroleum Development Agreement and even the Malaysia Agreement I am sure will take long, long time.

    “So what the Chief Minister’s is doing in taking such initiative is commendable because I believe that it is better to negotiate than going for a confrontation.

    “Like what he (Musa) said before that it’s better ‘less talk but more action’,” he said.

    Meanwhile, Bingkor Assemblyman Datuk Dr Jeffrey Kitingan said Musa should make a clear stand of the government’s intention.

    “The Federal and State governments should realise that they cannot take the people for granted and that the oil and gas resources belonged to Petronas and the Federal Government.

    “The federal Parliament had no business and no jurisdiction to legislate and pass the Petroleum Development Act, 1974, when it was clear that land and mineral resources including petroleum and gas remained under the State List in the Ninth Schedule of the Federal Constitution.

    “Under Section 24 of the Land Ordinance (Sabah Cap. 68), the petroleum and gas resources belonged to the Sabah Government,” he said.

    Jeffrey said it was under dubious circumstances the then Chief Minister signed the Oil Agreement on June 14, 1976 agreeing to accept five per cent cash payment for the oil and gas resources from Sabah and further agreeing to waive all collections of royalties payable to the Sabah government under Section 24 of the Land Ordinance.

    He said the 1976 Oil Agreement was signed without any discussion and mandate from the State Legislative Assembly as the resources belonged to the Sabah Government and not to the then Chief Minister.

    “If the Sabah leaders diligently check the history of oil in Sabah and the Hansard of the State Legislative Assembly, they will find that in 1971 it was declared that the Sabah Government had signed five petroleum agreements with oil companies and were entitled to 12.5 per cent in oil royalties in addition rents for the areas involved.

    As for the speculation of asking for shares in Petronas, it is the legal right of the governments of the oil producing States, Terengganu, Kelantan, Sabah and Sarawak, to be entitled to full ownership of Petronas.

    “Petronas is what it is today, due to the oil and gas revenues generated from the oil producing States.

    Of course, giving credit where it is due, the management of Petronas, past and present, ought to be commended for their efforts in transforming Petronas to what it is today” said Jeffrey.

    “If the past history of distribution of oil revenue is any gauge, 95pc of Petronas’ shareholding should be given to the oil producing States and the remaining 5pc shares be given to the federal government as a gesture of goodwill by the oil producing States,” he said.

    Like

  6. Joe Fernandez says:

    Ronnie Klassen says he didn’t badmouth me in Selva’s Blog.

    Sent by DiGi from my BlackBerry® Smartphone

    Like

  7. Joe Fernandez says:

    Ronnie Klassen wrote: Be advised JF, I never hide behind a blank face, not my style. If I hve anything to say, I’ll say it so that everyone knows I said it. Tks for the alert anyway.

    Sent by DiGi from my BlackBerry® Smartphone

    Like

  8. Joe Fernandez says:

    If Sabah is producing 25 per cent of the oil and gas in the Federation, then it should logically get 25 per cent of the shares of Petronas worldwide.

    But what about the liabilities of Petronas? Will 25 per cent of it be dumped on Sabah as well although the nation (Sabah) was not responsible for it?

    What about all the oil and gas taken from Sabah — Sarawak too — by Petronas/Federal Government since 1976? How will Sabah be compensated for this? Will the compensation be at 8 per cent interest per annum, compounded yearly? The PDA is unconstitutional.

    Federal allocations to Sabah, under the Constitution, must be viewed separately from the issue of Petronas.

    Sent by DiGi from my BlackBerry® Smartphone

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  9. Taib says:

    This is a genius of an idea, everyone including Jeffrey Kitingan and even Pakatan Rakyat and now Sarawak CM, all harping on the percentage of royalty 20% or 30%, BUT Musa AMAN has got a brand new idea that is: To have 20% OWNERSHIP in PETRONAS. Fantastic very smart move. If this goes through SABAH will get easily RM 8 billion every year in dividends, memang kaya Sabah.

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  10. ah boy says:

    Without Sabah & Sarawak, Petronas NO WAY to remain in Fortune 500, Sabah should get the ball rolling and demand what’s rightfully ours. Too long Petronas has been milking Sabah. KL got all its money for development from Sabah $$$$.

    Like

  11. Joe Fernandez says:

    People like Ronnie who have nothing to say should shut up if they can’t rebut.

    Not try to pass off getting personal and offensive as if they have something important to say.

    Sent by DiGi from my BlackBerry® Smartphone

    Like

  12. Joe Fernandez says:

    As a journalist, it’s not my work to propose solutions. I am not Government.

    malaysiakini did not kick me out. They failed to pay the lawyer who defended them in a defamation case which was struck out by the High Court. Still, I covered the RCI for malaysiakini last year through five comment pieces. Google.

    Writing about a law firm which keeps for 15 years the monies belonging to a Client is not nonsense. It’s a matter of public interest and public concern.

    The statement on Sarawak is sheer nonsense. My family is from Sarawak.

    My brother and I were born in KK where my father from Penang was working at that time.

    Sent by DiGi from my BlackBerry® Smartphone

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  13. ronnie says:

    This Joe Fernandez is just an armchair critic and he is only good in giving comments and criticise but hardly any solutions. It is no surprise why Malaysiakini kicked him out, so did Sarawak, even Ansari Abdullah sued him for writing nonsense.

    Like

  14. Joe Fernandez says:

    Man does not live by bread alone.

    We need to focus on the System, not individuals and personalities.

    People come and go, the System goes on.

    Sent by DiGi from my BlackBerry® Smartphone

    Like

  15. Joe Fernandez says:

    wikiSabah … Datuk Dr Jeffrey Kitingan, Sabah STAR Chief, commenting on speculation that the Chief Minister intends to seek shares in Petronas for Sabah’s oil and gas resources rather than an increase in “Oil Royalties”.

    “Under Section 24 of the Land Ordinance (Sabah Cap. 68), the petroleum and gas resources belonged to Sabah (government).”

    Sent by DiGi from my BlackBerry® Smartphone

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  16. David Wong says:

    Good idea, Sabah would get easily RM 8billion a year in dividends from Petronas if this deal happens. Every Sabahan will be eligible to get rm300 to rm 500 every month from the Sabah government, better than BR1M. Go for it Datuk Musa Aman.

    Like

  17. Better to break up Petronas.

    Like

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