Folks, have you been following the ‘Ku Li’ road shows lately on the Kelantan oil royalty (is there any other definitive description if you prefer NOT to use the contritely mischievous ‘wang ihsan’ excuse by UMNO Baru) issue?

Read here and here.

Kickdefella did a series of related postings last year and I’ve ‘borrowed’ the following maps (further below) from one to illustrate a simple analogy.

Hypothetically, if Kelantan is an independent and sovereign nation, the national ‘sea’ boundary from Malaysia will therefore start from Terengganu. Right?

And in theory, a geographical map would appear as shown below i.e. with reference to point B:

Therefore, instead of negotiating with Thailand on the JDA for oil and gas exploration and extraction, Malaysia would have to do so, bilaterally, with Kelantan.

It might even be a tripartite (with Thailand) excercise if the EEZ’s 200km is taken into account. Or a quadripartite, if Vietnam wants to jump into the fray.

When the Petroleum Development Act (1974 PDA) was formulated, the vesting deeds appropriated by Petronas from the oil/gas-producing states in Malaysia were meant to safeguard the nation’s natural resources and the resulting income be channeled into the prevailing and future development of the country as a whole.

Embedded as a guiding principle in the PDA, the producing states will also get an annual 5% cash payment for disbursement at the prerogative of the state-government-of-the-day. After all, it’s their God-given O&G in the first place.

From the outset, the PDA was a ‘win-win’ strategy because the capital investment required for the O&G industry would be beyond the financial capabilities of the individual state.

That was so until UMNO Baru got ‘greedy’ with an act of parliament which made Petronas answerable solely to the PMO. In other words, no one knows how much Petronas have earned and how it was used since 1974 because a public audit was never done. (Both Barry Wain and TDM ain’t answering my calls).

And the equally disingenuous three nautical mile limit espoused by UMNO Baru somehow got tangled up along the way of Terengganu realpolitik.

Suffice to say, the UMNO Baru-led BN administration had conveniently used Kelantan as a ‘yardstick’ to negotiate the JDA with Thailand and thereafter, turned around and made Kelantan into the largest ‘orphanage’ this side of Timbuktu.

Other maps (from Kickdefella’s blog):