10% stake peanuts compared to 20% Oil & Gas Royalty

The Sarawak Government should not be so contented about the 10% share in MLNG 4 and treat it as a substitute for 20% oil and gas royalty. 

If we were to compare the revenue generated from the 10% equity and the 20% oil and gas royalty, there is a shocking disparity.


The Sarawak State Government’s Financial Statement published in the 2012 Auditor-General’s Report shows the following:

Dividend Paid by MLNG 1, 2 & 3 to the Sarawak State Government

Company
2008
(RM million)
2009
(RM million)
2010
(RM million)
2011
(RM million)
2012
(RM million)
Malaysia Liquefied Natural Gas SdnBhd
435.00
255.00
250.00
405.00
350.00
Malaysia LNG DuaSdnBhd
550.00
180.00
560.00
910.00
710.00
Malaysia LNG TigaSdnBhd
530.00
260.00
390.00
520.00
460.50

On the other hand, the 5% Oil and Gas Royalty revenue received by the Sarawak State Government over the same period as reported in the same report are as follows:


2008
(RM million)
2009
(RM million)
2010
(RM million)
2011
(RM million)
2012
(RM million)
Compensation in Lieu of Oil Rights
1,322.60
894.21
899.20
1,096.50
1,238.42
Compensation in Lieu of Gas Rights
819.69
970.73
830.81
953.48
1,387.14
Total Revenue from the 5% Oil & Gas Royalties
2,142.29
1,864.94
1,730.01
2,049.98
2,625.56


From these past records of revenues, it is obvious that revenue generated from the 10% shareholding in MLNG 2 or 3 (Sarawak has 10% stake in these companies) is only 1/10th of the potential revenue that can be generated from the additional 15% of the oil and gas royalty.

Moreover, to participate in the 10% stake, the Sarawak Government is expected to come up with capital contribution in the millions.


As the Opposition Leader of the Sarawak State, I advise the BN State Government to hold firm to the unanimous decision of the DewanUndanganNegeri in passing the resolution for the 20% oil and gas royalty for Sarawak and not be penny wise pound foolish by being veered from the 20% oil and gas royalty demand with this 10% stake in MLNG 4.