Kelantan : Between Royalty and Ihsan Payment

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“Kelantan will receive compassionate payment from the federal government from the state's offshore oil production revenue starting next year”

Prime Minister Najib (source)

This is the announcement made by Malaysian Prime Minister, Dato Seri Najib Razak during the Malaysian Parliament session yesterday. Nevertheless, some MP’s from Kelantan still raised the question about the matter. Why it must be Compassionate payment instead of Royalty Payment. It never changes the fact that Kelantan is among the oil and gas producer in the federation alongside Sabah, Sarawak and Terengganu.

Siti zailah (Rantau Panjang MP) with her firm stances voices whether the Federation will gave the payment to Kelantan Government or to the Federal JPP. Salahuddin Ayub (Kubang Kerian) also urges the Federation to pay the oil royalty payment to Kelantan just like it has been done to other states, 5% from the total of oil production from the state. His opinion also agreed by Tengku Razaleigh Hamzah (Gua Musang) who is the Petronas’s Chairman in 1975. He is also the one who signed the treaty at that time.

Kelantan Offshore

Prime Minister Najib on the other hand answering the question said that the Kelantan Government never had the rights of oil royalty because the oil production is coming from the joint venture area between Thailand and Malaysia (JDA).

Soon after the announcement, the Kelantan State Government has voiced its decision to file an injunction to the Federal Government. The state government however, still open for any negotiations.