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25TH January 2011

Kepayan, Sabah—At a ‘Borneo Tea Party’ hosted by United Borneo Front (UBF) supporter, Andrew Joseph Tuining, in Kampung Ganang, Kepayan, UBF leader Datuk Dr. Jeffrey Kitingan suggested that Sabah’s petroleum share of 5% be reviewed.

In response to a question from a young guest as to how a unilateral decision could be made by the State Government to sign away oil rights to PETRONAS in 1976, Dr. Jeffrey confirmed that by the Petroleum Development Act of 1974, PETRONAS is granted the exclusive right in perpetuity to explore, exploit, win and obtain petroleum onshore and offshore in Malaysia; the rights, liberties, powers and privileges of which shall be irrevocable. In return for this, Section 4 of the Act states that PETRONAS shall make cash payments to the Federal Government and relevant State Governments (where oil is derived) as may be agreed between the relevant parties.

“The State Government of Sabah has immense power to review this contract with PETRONAS. The Petroleum Development Act of 1974 effectively vests all petroleum throughout this country in one company forever. Whether this is unconstitutional to the Malaysia Agreement of 1963 and an unconscionable Act of Parliament is something that the people of Borneo should keep in mind. People are fearful of their lives when bringing up this issue because substantial business interests running into billions of dollars every year are affectively shared between the wholly government owned PETRONAS and their foreign partners like the Royal Dutch Shell company. The shareholders of Royal Dutch Shell PLC company, incorporated in the UK in 2002, include some of the most powerful personalities, companies and countries in the world such as Britain, Singapore, Kuwait, Saudi Arabia and Norway. In December 2009, PETRONAS and Royal Dutch Shell company have signed the deal to develop Iraq’s oil field of Majnoon with 60% going to Royal Dutch Shell and 40% going to PETRONAS. Whatever is derived from Sabah’s oil fields are peanuts compared to where PETRONAS is heading overseas with their foreign partners. So, why can’t they be reasonable and review that measly 5% that was agreed upon in 1976? The Act of Parliament can be amended just as the Federal Constitution can be amended and we should go back to the negotiation tables pursuant to Section 4 of the Petroleum Development Act of 1974 to review how much cash payments Sabah should receive from PETRONAS,” Dr. Jeffrey said in his statement.

He added, “ If the World Bank states that Sabah is the poorest state in Malaysia, then judging from the international activities of PETRONAS, which is entirely the government’s, Sabah has clearly been short-changed and taken for a ride by both the Federal people in Malaya and the powerful people behind those foreign-owned giant oil companies overseas. Shell’s interest in Borneo’s oil reserves is not new. They have been given the right to explore oil in this area since the early 1900s, so it is hardly surprising that they would continue to have vested interests in our petroleum with PETRONAS. Nobody is going to fight this issue with international powerful people in this business knowing it would be an exercise in futility. We would merely want PETRONAS to review our share because they are clearly making more than their fair share outside Sabah and should not be selfish to Sabahans on what should rightfully be ours.”

The tea party included a seminar conducted by Dr. Jeffrey and his advisers, Nilakrisna James and Zainal Ajamain, touching upon the political history of Malaysia’s formation, the economic issues on cabotage and State resources and the laws which legitimises unfair economic policies.


  1. Only Anwar-led Pakatan Rakyat had so far agreed to increase oil royalty to Sabah, Sarawak, Trengganu, and Kelantan from 5% to 20%

  2. What would happen to Sabah when the oil already depleted is to be exhausted in a few years time even with a much higher rate of sharing or royalty?

    Would you imagine the consequence when the resources of the nation already plundered towards nihilism?

    Would we be grabbing some straws and hopeless?

    Nobody can help us except ourselves with the help of God.

  3. Most people have been talking or gossiping 46 years and nothing seriously was done except now some people are talking louder without the appropriate avenue to obtain solution for Sabah in Borneo.

    Who are anti Government when the governments we have are illegal ones mainly due to the general elections had been largely rigged by for as many times GE had been held? Has anyone voiced out on that except I had presented two High Court cases on the rigged GE 2004 and 2008. The lopsided Court judges did not want to see the fact and evidence presented except to strike out the cases for technical ground like time factor. The evidence if pursued by more people would definitely bring down the corrupted and doom governments- federal and state - hence such leaders are akin to political "prostitutes" and these people are actually traitors.

    God help Sabah..

  4. It is a business reality as Sabah oil has been signed away to foreigners and cronies included, it is impossible to get 20% because Petronas does not even that for the Sabah sector..

    20% is a deception and for talk only..


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