Kelantan To Use Political, Diplomatic Channels To Get Oil Royalty

KOTA BAHARU-- The Kelantan state government will use political and diplomatic channels to get oil royalty totalling RM1 billion from the federal government, the State Legislative Assembly sitting was told Monday.

Chairman of the State Committee on Economic Planning, Finance and Welfare Datuk Husam Musa said the state government had sought the views of several legal firms in terms of the technical aspects but the move was still at the preliminary stage and he was confident that the oil royalty claim could be resolved through political and diplomatic channels.

"I'm confident that the Prime Minister (Datuk Seri Mohd Najib Tun Razak) will consider the letter submitted by Kelantan Menteri Besar Datuk Nik Abdul Aziz Nik Mat," he said when replying to Datuk Noor Zahidi Omar (Pengkalan Kubor-PAS) during question time.

Husam said he was confident that the federal government would consider granting the royalty because the oil rig in Terengganu was located 220 kilometres off the waters of the state and it was receiving the royalty.

Whereas the oil well in Kelantan was located 170 kilometres off the state waters, and as it was closer compared to the Terengganu oil rig, it was appropriate that Kelantan received the oil royalty, he said.

He said the state government was merely asking for between RM850 million and RM1 billion from the federal government under the Petroleum Act 1974, which entitled the state to receive an oil royalty of five per cent from the proceeds derived from petroleum.

Husam also hoped that there was no discrimination against Kelantan in the royalty payment as was the case in Terengganu when PAS administered the state from 1999 until 2004 when the allocation was changed to special payments.

Replying to another question from Noor Zahidi, he said the state government would set up the Kelantan Gold Trade to undertake trading in the gold dinar in the face of the world economic recession.

He said the state government planned to trade in gold to avoid using paper currency.

"One cannot speculate in gold as it has a stable market value compared to paper currency.

"One can easily speculate in paper currency which can lead to fluctuations and instability," he said.

Husam said the state government had also held discussions with several banks to enable the government to make deposits in dinar.

-- BERNAMA