Anwar seeks to amend Petroleum Act

KUALA  LUMPUR:  Opposition Leader Anwar Ibrahim (picture) is presenting a Private Member Bill  proposing to amend the Petroleum Development Act.
He is seeking an amendment to Section 10 of the act so that states will have their royalty rights spelt out clearly.
The amendment is by way of  inserting a Section 10A which defines “offshore” as a portion of open sea that falls within the limit of the Exclusive Economic Zone of the Federation and measured in accordance with relevant laws adopted by the Federation at a particular time.
The bill states that:
+ The current controversy surrounding the issue of royalty from oil extraction activities offshore the states of Malaysia arises due to the ambiguity surrounding the word “offshore” in the Petroleum Development Act 1974
+ The word “offshore” is used three times in the act; however, it is not defined anywhere in the act
+ Because the act was drawn up to lay down, among other things, the terms of reference for the surrender of rights over hydrocarbon resources from the states to the Federal Government, it is only logical that “offshore” refers to all petroleum activities carried out in a state at the particular time the act was drafted, i.e. including those oil fields off the Terengganu shore beyond the 3 nautical miles argument
+ The 3-nautical-mile boundary only came to the picture by way of inference, due to the ambiguity of the definition of the word “offshore”; the BN government falls back to the definition of territorial waters contained in the Emergency Ordinance Act 1969 to draw a distinction with the boundary to which “offshore” (mentioned in PDA 1974) shall be limited to.
The amendment intends to clarify the word “offshore”  so that it reflects “the true intent and the spirit of PDA 1974 when it was drawn up and the mutual understanding between the states and the Federal Government when the former agreed to surrender their claims over hydrocarbon resources,” according to the bill.
“It will also help avoid ambiguity in the future so as to provide a clearer fiscal regime to the oil and gas industry as the current tussle between the Federal and state governments sends a negative signal to future investors in the offshore oil and gas sectors.
“Normally one of the most important features that an oil and gas company looks for before investing is the clarity, stability and trustworthiness of the legal framework concerning the ownership of hydrocarbon resources.”
The bill says the federal government has been “twisting and turning the spirit of PDA 1974 by utilising the legal loophole arising from the non-definition of the word ‘offshore.’”