Who blocked oil money to Sarawak? Ex-AG taken to task for blaming Petronas

A political analyst has rejected a claim by former attorney-general Tommy Thomas blaming the non-payment of billions of ringgit owed to Sarawak by Petronas on the national oil company.

Instead, James Chin said the greatest stumbling block to promises by Putrajaya to settle payments related to Sarawak’s oil and gas revenues were the Pakatan Harapan (PH) leaders themselves.

“I disagree with him that the stumbling block to increasing the oil and gas cash payment to Sarawak came from Petronas,” he told MalaysiaNow.

“In fact, the people blocking it were actually Mahathir and Lim Guan Eng,” he said, referring to former prime minister Dr Mahathir Mohamad and the finance minister who served for 22 months under the previous government.

He also accused Mahathir of not intending to keep the promise.

The comments are the latest in a series of reactions over Thomas’ version of key political events in his autobiography “My Story: Justice in the Wilderness”.

The book reveals, among others, Thomas’ secret five-year ambition to become the attorney-general, and the top-level discussions that took place under the PH government up to the political crisis which saw the collapse of the coalition.

In his book, Thomas accused Petronas of being the “greatest stumbling block” to the PH’s government promise to increase cash payments on oil revenues to Sarawak and Sabah from 5% to 20%.

The pledge was part of PH’s 2018 general election manifesto.

Thomas claimed he had reminded Mahathir of the promise, saying amending laws for the purpose would be “as easy as pie”.

The year after PH’s election victory, the Sarawak government, under the rule of Gabungan Parti Sarawak – a group of parties which exited the Barisan Nasional coalition following its election defeat – imposed a 5% sales tax on Petronas’ petroleum products under the state’s Sales Tax Ordinance 1998.

The move would mean Petronas paying some RM2 billion, which the national oil company said was unconstitutional.

Thomas claimed he refused a request by then-managing director of Petronas Wan Zulkiflee Wan Ariffin that Putrajaya back a suit by the company to challenge the move.

Thomas said Petronas then approached Mahathir and Lim.

“Lim Guan Eng, noted for his persistence, telephoned me, and asked me to get the federal government to intervene. I stood my ground. The minister was not happy. Neither was Petronas,” Thomas wrote.

In March 2019, the Kuching High Court ruled that the two states had the right to impose the sales tax.

But it was only after the federal government changed hands under Prime Minister Muhyiddin Yassin that Putrajaya agreed to settle the RM2 billion sales tax, and to speed up other oil-related demands from Sarawak.

‘MA63 committees nothing new’

Thomas in his book also praised PH for setting up several committees on the Malaysia Agreement 1963 (MA63), a document that spells out the terms for Sarawak and Sabah’s entry into the newly formed Malaysian federation that year.

He claimed that the three committees formed by PH to look into the implementation of MA63, which among others gives Sarawak and Sabah autonomy in several key sectors, marked the first time the problems faced by the two states were discussed.

“It was a major coup for the PH government to have pioneered serious efforts to improve relations, which had deteriorated over time,” Thomas, who was a co-chairman of the MA63 constitutional committee, wrote in his book.

But Chin said the idea of setting up such committees was nothing new.

He said it was former prime minister Najib Razak who first started the initiative to set up a federal-level committee on MA63.

“And he was the one who declared a national holiday on Sept 16 to recognise Sabah and Sarawak in the formation of Malaysia,” he said.

Chin said despite many meetings, PH failed to resolve the most contentious issues on the states’ territorial jurisdiction as well as autonomy on oil and gas.

He said a problem with giving control over oil and gas to Sarawak would lead to similar demands from other oil-producing states such as Sabah, Kelantan and Terengganu.

He said Petronas would then have to include the state governments when entering into joint venture agreements with foreign oil companies.

“It could cause the federal government to lose a major portion of its development expenditure from Petronas,” he added.