A Sarawakian MP has dismissed claims that national oil company Petronas retains 95% of oil and gas (O&G) revenue from East Malaysia, describing them as unfounded and a distortion of the country’s petroleum fiscal regime.
Chiew Choon Man said such claims did not reflect the realities of the operational costs and business risks involved in offshore petroleum exploration and production, the Borneo Post reported.
“After carrying out studies and engaging with industry players as well as subject-matter experts, it is clear that the allegation is unfounded and misrepresents reality,” the Miri MP from PKR was quoted as saying.
He said between 70% and 80% of O&G revenue would be used to fund operations, from offshore exploration up to production.
Of the remaining 20% to 30%, about 5% would be directly channelled to the respective state governments while another 5% would go to the federal government, he said.
Chiew said a portion of the remaining 10% to 20% revenue was shared with Petronas’s production-sharing partners and further reduced by incidental costs.
“What remains then goes to the federal government through dividends and taxes for nation building.”
Chiew added that Petronas shouldered enormous business risks, as commercial success rates for offshore exploration wells were only around 20% to 25%.
He said he was dismayed that learned officials and politicians continued to make sweeping claims without fact-checking, adding that Sarawak’s struggle for a just share should be based on truth rather than distorted facts”.
He also said it was unfair to blame the present federal government, which had only been in power for two years and was “working tirelessly to correct decades of imbalances”.
His remarks came two days after former economy minister Rafizi Ramli said Petronas’s profit margins from O&G projects were only around 10% to 15% after accounting for heavy development costs and dividend payouts.
Rafizi was responding to Sarawak government legal adviser JC Fong, who reportedly said Petronas had taken 95% of the state’s O&G business for the past five decades.
The Pandan MP said the assertion was inaccurate and based on “half-baked figures”, ignoring the hundreds of billions that Petronas had invested to build the O&G sector in East Malaysia.
Last week, industry analyst Jamil Ghani described Fong’s claim as misleading, saying it overlooked key financial flows back to the state.
