New oilfield belongs to Terengganu

KUALA TERENGGANU- The newly discovered oilfield at Block PM 307 Bertam off the Peninsular Malaysia coast between Terengganu and Pahang belongs to Terengganu, the state legislative assembly was told today.

Mentri Besar Datuk Seri Ahmad Said said the state government has written an official letter to Petronas seeking an explanation on the oil discovery at the block.

He said the state government has not received an official reply from the national oil corporation to date.

"However, the state government has received a letter from Lundin Oil, a Sweden-based oil exploration firm undertaking oil exploration work in the area in collaboration with Petronas Carigali Sdn Bhd, confirming that Block PM 307 is in Terengganu territorial waters," he said when replying to Dr Syed Azman Syed Ahmad Nawawi (PAS-Batu Buruk).

Syed Azman wanted to know the state government's ownership status on the oilfield and the latest development on the oil royalty claim from Petronas and the federal government.

Ahmad said the state government has been informed that Petronas would pay the oil royalty in March next year through the federal government.

He said the payment would be made as the federal and state government had reached an agreement on the oil royalty claim.

On the state government's move to withdraw the summons against Petronas, Ahmad said the retraction was made after the federal government agreed to pay all dues from Petronas to the state government under a special fund as was agreed upon in the original agreement.

"Previously, Petronas disbursed payments in two instalments – the first week in March and in September while the federal government will pay in the fourth week of March.

"All payments will be paid in full next year without any deduction," he said in his reply to a supplementary question from Syed Azman.

Ahmad said that based on this assurance the state government agreed to retract the summons as what is of paramount importance is the state government receiving the full amount due from Petronas.

Speaking at a press conference later, Ahmad said the state government received RM2 billion in special funds from Petronas this year.

Last year, Petronas paid RM1.6 billion, he said.

The state government is expected to receive 5% more or an additional RM100 million a year, depending on the oil production estimates, when oil exploration at the PM307 Block starts in the third quarter of 2014, he added.

– Bernama