Saturday, April 03, 2010

Ku Li explains his role in Sabah oil royalty deal

When it comes to Sabah's oil wealth, the question always is, where is it? It has all been smoke and mirrors so far. The federal government has it, they say, or it is with Petronas, the national oil corporation that took over control of the black gold and natural gas under Sabah's soil.

The questions and answers are not pointless. Thirty-four years after the oil rights of the state were handed over to Petornas, the issue continues to stir anger and despair in this poverty-stricken state where oil was found more than 100 years ago.

The architect of the agreement that made Sabah give up her rights to her mineral wealth, Tunku Razaleigh Hamzah, was here on Good Friday to explain what happened and to raise further questions of his own.

Sabah never disputed the 5% oil royalty in its June 14, 1976 agreement to hand over oil extraction rights to the federal government, Petronas' founding chairman told his audience of around 500 people from all walks of life eager to hear his side of the controversial deal.

Sabah's Parti Berjaya was acceptable to the formula that was already embraced by the Sarawak government under Tun Rahman Yakub, the then chief minister, he told a forum on issues of oil royalty organised by United Sabah Dusun Organisation at the Hongkod Koisaan hall of Kadazan Dusun Cultural Association here yesterday.

Razaleigh, who was also finance minister at the time, gave his perspective on the issues surrounding Sabah’s acquiescing to the oil deal with Petronas that, he agreed, was initially bogged down with refusals and the tragic death of then Sabah chief minister Tun Mohd Fuad Stephens in an air crash on June 6, 1976.

"Fuad was agreeable to signing the deal based on the Sarawak formula. There were no disagreements to the 5% royalty. He (Fuad) had told me that if Sarawak was okay with it, Sabah will not object to sign the deal,” Razaleigh said.

The Gua Musang MP said that after the Petroleum Development Act was passed in 1974, he was tasked with negotiatjng with the states, but Sabah under Chief Minister Tun Mustapha Harun refused to even meet him to talk about Petronas.

"I was told that Tun Mustapha was angry with the federal government over some loan he wanted for the state and he refused to meet me,” he said, adding that he held talks with Fuad in the run-up to the April 1976 state election where Fuad’s Berjaya party toppled Mustapha’s Usno.

'Fuad didn't disagree'

However, Razaleigh said a day before the signing of the oil agreement with federal government on April 7, 1976, Tun Fuad and 11 others, including his (Razaleigh’s) political secretary, were killed in an air crash on their way back from Labuan to Kota Kinabalu, the incident that came to be known as the “Double Six” tragedy.

"I was in the Nomad aircraft seated behind Fuad and next to me was Rahman Yaacob and we had already put on our seat belts when the deputy chief minister Datuk Harris Salleh asked me, Rahman and a Pahang official to fly to with him on another Nomad to Pulau Banggi to see a cattle farming project.

"So we got off and joined Harris,” he said, explaining that on arrival at Pulau Banggi they were informed of the crash that shocked the nation.

"Fuad at no time disagreed with the deal we were going to sign the next day (June 7) in Kota Kinabalu” he said.

The agreement was ultimately signed by the Sabah government on April 14, 1976, by Fuad’s successor Harris.

The agreement was to pay 5% royalty for oil extracted from the states and the royalty was a cash payment and there was provision for “wang ehsan” (compassionate payment).

Regarding his recent claim that Petronas had made a massive oil discovery and the oil company's immediate denial, Razaleigh said a geologist involved in prospecting told him about the discovery. ``If Petronas has denied, I don’t want to say anything further.”

by FMT

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