In a speech at a “Dinner with the Minister” function here tonight, Liew said the time had come for the Sabah government to take the proper steps to manage its own oil and gas resources more effectively.
“Amending the Act would give the Sabah government more advantages in managing its own oil and gas.
“This is in line with the intention of the Pakatan Harapan government and Warisan to give equal rights to Sabah, as announced by Prime Minister Dr Mahathir Mohamad last Malaysia Day,” he said.
Liew also supported the amendment to Section 4 of the Land Ordinance, passed by the Sabah assembly yesterday, which refined the interpretation of land in Sabah.
The Land Ordinance (Cap 68) is amended in Section 4, in the definition of land to include the bed of any river, stream, lake or water course, with the area of the continental shelf being the seabed and its subsoil, which lies beneath the high seas, contiguous to the territorial waters of Sabah, as stated in the North Borneo (Alteration of Boundaries) Order in Council 1954.
The amendment allows the Sabah government to claim its rights on all natural resources in lakes, rivers and seabed in its Continental Shelf and, indirectly, strengthens Sabah’s claims for its rights under the Malaysia Agreement 1963 (MA63).
“This amendment to the Land Ordinance by the Sabah government is a holistic action in its effort to reclaim its rights on the sales tax on all minerals extracted in Sabah.
“The implication of this amendment will enable the federal government to be prepared to review or make appropriate amendments to any of the provisions of the law involved in the Petroleum Development Act 1974 and the Federal Constitution in general,” he said.
Under the MA63, Sabah’s boundaries have been set by the North Borneo (Alteration of Borders) Order in Council 1954, which some argued was more powerful when used in international law compared with the more local Land Ordinance.
The Sabah (then North Borneo) Order in Council extended the boundaries of the then Colony of North Borneo to “include the area of the continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of North Boneo”.
In terms of oil and gas, prior to 1974, Sabah had already started production of crude oil with then Sabah chief minister, the late Mustapha Harun signing six international oil agreements in 1969 with international oil companies to explore and mine the oil with Sabah to receive, among others, royalties of 12.5% of the oil concessions.
Under the PDA, Sabah receives only 5% profit based on gross production.
The Pakatan Harapan government, under the leadership of Prime Minister Dr Mahathir Mohamad, has said it would consider giving 20% royalty to Sabah but the value will be calculated based on net profit and not gross production.