The Petroleum Development Act 1974 (PDA74) although argued unconstitutional or an invalid Act and unless repealed, vested the ownership, rights, powers, liberties and privileges of oil in Sarawak and Sabah in the hands of PETRONAS. Since ownership of the oil and gas resources had been transferred into the hands of PETRONAS, PDA74 does not require PETRONAS to pay “royalties” but, “cash payment” as compensation for the loss of these resources to Sarawak and Sabah.

If the word, “royalty” or “royalties” are used in PDA74, it would show that the ownership of oil and gas resources extracted from Sarawak and Sabah still rests with Sarawak and Sabah, but not, because royalty payment is a payment made by one party to another that owns a particular asset for the right, for the right to on going use of that asset. There is no ownership of these oil and gas resources by Sabah and Sarawak under PDA74

Therefore, to say that Sarawak was entitled to a 5% royalty of oil and gas pumped by PETRONAS from Sarawak is doubted. Even if Sarawak was entitled to the 5% royalty, I could not find any proof that this amount had been agreed between Sarawak government and PETRONAS since PDA74 was passed by parliament. I also could not find any proof that the Sarawak government had been paid this 5% royalty since PDA74 was passed.

If I could recall, I had asked this at one time in the Sarawak Legislature, but, there had been no answer to my queries.

Under section 4 of the PDA74 what Sarawak and Sabah are entitled are “cash payment” in return of ownership of the oil resources that had been transferred or vested in the hands of PETRONAS. The sums to be paid has to be agreed between the parties because the PDA74 did not mention the exact amount Sarawak and Sabah are entitled and also how and when the cash payment could be paid.

Section 4 of the PDA74 states, “In return for the ownership and the rights, powers, liberties and privileges vested in it by virtue of this Act, the Corporation shall make to the Government of the Federation and the Government of any relevant State such cash payment as may be agreed between the parties concerned.”

It seemed that on or about 17 February, 2025 the prime minister disclosed in parliament as follows:
Daripada segi pulangan kewangan, Sarawak telah menerima: i. Bayaran Tunai (Cash Payment) sebanyak RM49 bilion (sehingga Disember 2024).

But it seemed that until now the Sarawak Government did not prove or disclosed to public whether this sum of money had been paid to Sarawak. In view of the huge amount of money involved, Parti Bumi Kenyalang (PBK) demands transparency about this matter.

How this sum of RM49 billion been calculated had not been disclosed. The formula is not known at all, that is whether this was based of 5% cash payment or less and how was it calculated? What was the value of the oil resources that was pumped by PETRONAS and from which period for the oil resources extracted by PETRONAS that caused this cash payment to be paid to Sarawak was made was not disclosed too by the prime minister.

Oil and gas are public property that belong to Sarawak and Sarawakians. The Sarawak GPS government, as custodian of public property for Sarawakians, has an obligation too, to disclose all these to members of public the formula that had been agreed for this cash payment of RM49 billion disclosed by the prime minister.

If the Sarawak government will not come with any confirmation concerning the receipt of this RM49 billion, then is shall be deemed that this money had never been received by the Sarawak GPS government. What we want is proof, not mere public statement.

VOON LEE SHAN
President,
Parti Bumi Kenyalang.