Azmin: Petronas 'seriously impacted' if 20pct oil royalty based on production

PARLIAMENT | Economic Affairs Minister Mohamed Azmin Ali (above) said Petronas will be seriously impacted if the 20 percent oil royalty promised to oil-producing states is based on gross production.

"If Petronas is required to increase oil royalty to 20 percent of gross production to oil-producing states, it would have serious implications on the financial position of Petronas and the federal government," he said in a parliamentary written reply to Madius Tangau (Upko-Tuaran).

Madius had asked Azmin to clarify Pakatan Harapan's promise to provide 20 percent oil royalty to oil-producing states.

The issue, raised by Madius in Parliament, was later followed up by Mustapha Mohamed (BN-Jeli).

Mohamed pointed out that the oil-producing states had expected the promised 20 percent to be based on production and not profit.

To this, Azmin said that when Pakatan Harapan drafted its manifesto, the 20 percent was based on net profit.

"It (the 20 percent of net profit figure) was arrived at after we analysed the cost structure," he said.

However, Azmin promised to engage the oil-producing states over the matter.

"Whether it will be 20 percent of net profit or gross value, we will discuss with the relevant state governments," he said.

Meanwhile, Ayer Hitam MP Wee Ka Siong later panned Azmin when the former was speaking to journalists at the Parliament lobby.

Wee said it was widely accepted that the definition of oil royalty is based on gross production.

"After having made a promise, don't change the definition because you are finding it tough to implement.

"You should just admit and be frank (that it cannot be done)," he said. -Mkini