SEMPORNA :The Sabah government will form a special committee to fine-tune the state's oil royalty claim made to the federal government.
Chief Minister Datuk Seri Shafie Apdal said the state government would discuss with the federal government through the body on how to go about payment of the royalty that was increased from five percent to 20 percent .
Through such discussion, the state government would ensure the 20 percent royalty claim would be realised, he told reporters after officiating a conference event for education retirees here today.
“We are currently receiving the five percent royalty, so the additional 15 percent needs to be detailed.
“The only issue here is the term of execution… We have already been informed it will be based on (net) profit (and not gross production).
“If the additional (15 percent) is based on a different approach from the current five percent (payment system), which is based on dividends, we need to voice our opinions government-to-government,” he said.
Economic Affairs Minister Datuk Seri Azmin Ali was recently reported as saying that the Petroleum Development Act (PDA) needed to be amended before the new royalty payment could take effect.
He had said that the proposed 20 per cent oil royalty must be based on net profit rather than gross production to avoid negative financial impact on both Petronas and the federal government.