Sarawak govt ‘disappointed’ with decision by Federal Court to postpone hearing on Petronas case

KUCHING: The Sarawak government has expressed its “deep disappointment” with the decision by Federal Court to postpone to June 21 a hearing over the state rights on its oil and gas resources.

In a statement yesterday, the state government said it will consider all other options to protect and enforce its constitutional rights in this matter, 

On June 4, Petroliam Nasional Bhd (Petronas) filed a suit seeking a declaration from the Federal Court that it is the exclusive owner of petroleum resources in the country, as well as the only regulator of upstream activities nationwide, including in Sarawak.

The case was supposed to be heard on Monday, June 11.

“It is surprising that Petronas who made the application and sought an urgent hearing has no objection to the postponement of hearing of the case,” it said.

The postponement, according to the statement, was granted without according the Sarawak Attorney General legal team the courtesy of being heard on the state government’s objection.   

“The state government would not allow Petronas to disrespect and disregard our rights to regulate the upstream activities under our laws such as the Oil Mining Ordinance and the Land Code,” it said.

Over the past year, Sarawak has embarked on several initiatives that would see Petroleum Sarawak Bhd (Petros) come into force from July.

An official letter from Sarawak Attorney General (AG) Datuk Talat Mahmood Abdul Rashid to Petronas president and chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin on April 13 stated that from July 1, the state government would regulate the downstream and upstream O&G industry in accordance to state laws.


Tussle for O&G resources

Petronas and Sarawak at loggerheads over control of petroleum rights

PETALING JAYA: In a move seen as a challenge to Sarawak’s claim over petroleum ownership, Petroliam Nasional Bhd (Petronas) has gone to court to declare that, under the Petroleum Development Act 1974 (PDA), it is the exclusive owner of oil and gas resources in Malaysia.

The national oil corporation on Monday announced that it had filed an application before the Federal Court seeking for a declaration on the PDA being the law applicable for the petroleum industry in the country.

Meanwhile, in a related development, the Sarawak state Government said it will defend its rights in court. (see story in Page 2)

The application by Petronas stated that the national oil company was the exclusive owner of the petroleum resources as well as the regulator for the upstream industry throughout Malaysia, including in Sarawak.

“Petronas believes that the determination by the Federal Court would help provide clarity on its rights and position under the PDA,” the group said in a statement.

“Petronas remains committed to support Sarawak’s aspiration to participate in the oil and gas (O&G) industry in the state, for as long as it is within the framework of the PDA,” it added.

The move by Petronas came just a month before the Sarawak government is expected to assume full regulatory authority over the upstream and downstream operations and activities of the O&G industry in the state by July this year.

Sarawak established its own O&G company, Petroleum Sarawak Bhd (Petros), last year. At the launch of the company in March this year, Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg said Petros would spearhead the state’s participation in the strategic O&G industry to boost state development, adding that Petros would be granted the rights to mine O&G in the state.

Abang Johari recently also said all companies or persons involved in the O&G industry must henceforth have the necessary licences, leases and approvals required either under the Sarawak Oil Mining Ordinance 1958 or Sarawak Gas Distribution Ordinance 2016.

Sarawak, as well as Sabah, had long been seeking for their O&G royalties be increased to 20%.

Both states currently receive royalties of around 5% from Petronas for O&G revenues.

However, Abang Johari recently lamented that the state government’s request to Petronas for an increase in oil royalty to 20% had proved to be difficult to secure.

“That is why the state government started petroleum company Petros to develop our oil resources using our own means,” Abang Johari said.

“By having our own petroleum company, we will chart our own development agenda,” he added.

Prior to winning the 14th general election last month, Pakatan Harapan had pledged to give O&G-producing states a “reasonable sum” for royalties if it took over the federal government. Under this election manifesto, O&G royalties to Sabah and Sarawak would be raised to 20%.

Meanwhile, in September last year, Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said while he welcomed any involvement by state government entities in the O&G business, all activities must comply with the PDA.

“We have a strong relationship with the Sarawak government, as such, we welcome its participation in the O&G industry. But we also have regulations in place, of which under the PDA, Petronas is the custodian and manager of the O&G resources in Malaysia,” he said.

Wan Zulkiflee noted that the partnership with Petros could be similar to other Petronas partnerships, either as service providers or as a partner under the production sharing contract.

When asked about the potential partnership between Petronas and Petros, Wan Zulkiflee said: “Discussions are ongoing with the Sarawak government.”


Introducing Petros – Sarawak’s own oil & gas company

Chief Minister Abang Johari Openg says the firm’s board members will consist only of Sarawakian professionals and non-politicians.

PETALING JAYA: Sarawak has set up a wholly state-owned oil and gas company named Petros to conduct fossil fuel explorations within its territorial waters.

Chief Minister Abang Johari Openg announced the formation of the company yesterday, saying that its board members would comprise Sarawakian professionals within the industry.

The Borneo Post reported him as saying that there would be no politicians on the board, and that only those with substantial experience in the oil and gas industry would be chosen to serve in it.

However, he did not reveal the name of the members, and holders of other posts such as that of chairman and chief executive officer.

“We have officially formed our oil company, Petros,” he was quoted as saying during an appreciation dinner organised by his office.

“The formation of Petros is an unprecedented step taken by the state government to enable Sarawak to actively participate in the extraction of oil and gas in Sarawak while still pursuing its request for a 20% royalty from Petronas,” he added.

Abang Johari also reportedly said that the newly-formed Development Bank of Sarawak (DBOS) would begin operations soon, and that its CEO has been appointed but did not disclose the name.

Like Petros, the bank would have board members only from among Sarawakians who are professionals and non-politicians, he said.

The DBOS chairman’s seat is held by state secretary Mohamad Morshidi Abdul Ghani.

“We have appointed the CEO already and this CEO will have his team under the supervision of the state secretary while the board members are all non-politicians and professionals who will carry out activities of the bank to develop our state,” he was quoted as saying.

On June 10, Abang Johari had announced the state’s plans to establish its own firm to work with Petronas to conduct explorations, saying that the national oil and gas company was agreeable to the proposal.

He said the move was in addition to the state’s call for an increase in oil royalty for extractions made within its borders, from 5% to 20%.

He also said it was part of the state’s initiative to have a more significant stake in the industry within its borders.

Sarawak to form state company for oil and gas exploration

Sarawak’s revenue drops by RM1 billion as oil prices decline

Selling off Sarawak’s oil and gas assets: Myth or reality?


Sarawak to implement regulatory rights on oil, gas beginning July 1

BEGINNING July 1, Sarawak will implement regulatory rights on oil and gas activities in the state, said Chief Minister Abang Johari Openg.

He said this following the federal court’s dismissal of Petroliam Nasional Bhd’s (Petronas) application for leave to commence proceedings against the Sarawak government’s move to regulate the state’s petroleum activities.

Abang Johari said the state government’s move was in accordance with the law stipulated in the federal constitution.

“This means that some of the powers under the Oil Mining Ordinance (OMO) 1958 will be implemented by Petros (Petroleum Sarawak Bhd),” he said.

Yesterday, Chief Judge of Malaya Ahmad Maarop dismissed Petronas’ application after deciding that the federal court could not hear the matter, as the declaratory relief sought by the national oil company was not covered under the jurisdiction of the federal court, but the high court.

Abang Johari said only the Sarawak government had the rights to regulate the oil and gas activities from the point of law as stipulated in the federal constitution.

When asked if Petronas needed to apply for a permit or permission from Sarawak to be involved in oil and gas activities in the state hereafter, he replied: “What is happening now is that we have the state law that Petronas must abide to.”

Sarawak would not create a difficult environment with abnormal conditions for the oil and gas industry in the state, and would ensure that it continued to run smoothly, he said.

Abang Johari said Sarawak’s next state legislative assembly sitting would table the bill to amend OMO 1958, as some of the matters in the ordinance were no longer relevant with the current situation. – Bernama, June 23, 2018.


Chong suggests S’wak file case on rights to O&G in High Court

Chong (second left) and Pending assemblywoman Violet Yong (left) sharing a light-hearted moment with Chief Minister Datuk Patinggi Abang Johari Tun Openg (third left), Abdul Karim (third right), Local Government and Housing Minister Datuk Dr Sim Kui Hian (right) and State Legislative Assembly Speaker Datuk Amar Mohammad Asfia Awang Nassar (second right). — Photo by Muhammad Rais Sanusi

KUCHING: State Pakatan Harapan (PH) chairman Chong Chieng Jen has suggested that the Sarawak government make the first move and file a case in the High Court if it is serious about reclaiming its rights over oil and gas in the state.

This, he said, would ensure that the sole authority over upstream oil and gas activities in Sarawak is clarified once and for all.

“I think as a responsible government, you have to take the matter to court to find out whether the Petroleum Development Act (PDA) 1974 or the Oil Mining Ordinance (OMO) by the state prevails.

“Currently, it’s causing a lot of uncertainties in the oil and gas industry and this has to be clarified,” he told reporters when met after paying Tourism, Arts, Culture, Youth and Sports Minister Datuk Abdul Karim Rahman Hamzah a Raya visit at his Hari Raya open house held at Penview Convention Centre here yesterday.

He was commenting on the Federal Court’s dismissal of Petroliam Nasional Berhad’s (Petronas) application to commence proceedings to determine that the national oil company is the sole authority of all upstream oil and gas activities in the country, including Sarawak.

Chief Judge of the High Court of Malaya Tan Sri Ahmad Maarop had on Friday rejected Petronas’ application of leave to commence proceeding on the matter in the Federal Court.

Chong, who is also Sarawak DAP chairman, said the Federal Court’s decision did not clarify on whether the state government or Petronas has authority over oil and gas in the state.

“It’s neither a victory nor loss for either party at the moment and Petronas was asked to pay RM50,000 to the state government because it has filed in the wrong court.

“But it did not clarify the position of the law and now with this uncertainty on whether PDA or the state has the power, I think it has to be sorted out,” he opined.

The Stampin MP reiterated that if the state government is serious, it should file the case at the High Court as once this issue has been determined in the court of law, there would not be any conflict.

“If at the end of the day, the court says you (state government) have no claim, the state can still fall back on the 20 per cent oil royalty we (PH) have offered.

“In the oil and gas industry, a 20 per cent oil royalty is almost the maximum you can earn from extraction and sale of oil because you have the cost, research and development, and oil exploration cost to take into consideration,” he remarked.

He added that there was no point for the Sarawak government to state that it has the right to its  upstream oil and gas activities outside of court.

“It doesn’t serve any purpose and will only add to confusion and uncertainty to the industry,” he said while pointing out that this will also cause Sarawakians to suffer as employment and business opportunities will be affected.

Last month, Petronas filed an application to seek a declaration from the Federal Court on matters pertaining to the PDA and its position on the regulatory controls of upstream activities in Sarawak.

The national oil and gas company is seeking a declaration that the PDA was duly enacted by the Parliament and stated that Petronas is the exclusive regulatory authority for the upstream industry throughout the country.

Petronas is also seeking a declaration that the OMO was repealed by the PDA and hence Sarawak’s own oil and gas company, Petroleum Sarawak Berhad (Petros), which will serve as the regulator of oil and gas activities in Sarawak based on OMO, is not valid.


Sarawak’s Brooke Dockyard wants more Petronas jobs

KUCHING: The Sarawak state government wants Petroliam Nasional Bhd (Petronas) to award more offshore fabrication contracts to Brooke Dockyard and Engineering Works Corp as it has tripled its fabrication capacity.

The 107-year-old state-owned corporation has raised its fabrication capacity by 16,500 tonnes to 25,000 tonnes per year with the new Demak Yard in the Demak Industrial Estate near here.


Sarawak CM must resolve oil, territorial disputes through the court, says DAP

WHILE there are valid considerations the Petroleum Development Act and the Territorial Sea Act have contravened the Federal Constitution, there was no legal basis for Chief Minister Abang Johari Abang Openg to declare they are not applicable in Sarawak.

Abang Johari, at the launch of the state-owned Sarawak Petroleum Bhd (Petros) on Wednesday, said Sarawak would assume full regulatory authority over the oil and gas industry in the state by July. 

He also claimed oil companies wishing to do business, including Petronas, must have the necessary approvals from the state government.

The chief minister was echoing statements on Monday the state has reclaimed its oil and gas rights, saying federal laws ensure the resources remain in Putrajaya’s hands.

Sarawak DAP women bureau affairs chief Irene Chang said laws Abang Johari’s claimed had no force such as the Petroleum Development Act 1974 (PDA), Territorial Sea Act 2012 (TSA) and Tripartite Agreement, signed by the federal government, Sarawak government and Petronas, have not been repealed or rescinded.

“To declare these two legislations as null and void and therefore have no application in Sarawak, the chief minister has to bring the matter before the courts of law. 

“Until the courts declare as such, the acts are in force and applicable in Sarawak,” Chang said. 

“To say otherwise is to give people false hope and the state government owes it to the people to set the matter right,” said the Bukit Assek assemblyman.

PDA gives Petronas exclusive ownership right to the oil and gas resources in Malaysia, and makes it the main regulatory body for upstream oil and gas activities. 

Under TSA, Sabah and Sarawak could not exert its sovereignty beyond 3-nautical miles from its shores, short of the 12-nautical mile limit on other coastal states. 

Chang urged Abang Johari to lead the state’s legislators to pass a motion to review the two acts and to get a court order to declare them null and void.

She added the state government might even have a legal argument to demand for the return of all the revenues earned from the resources from 1974 until now.

“Petros and Development Bank of Sarawak, although impressive and would create jobs, but whatever oil and gas that may be exploited in our waters, still need to go back to Petronas. 

“We are entitled to only 5% of the royalty,” she said. 

Chang said if the courts declared the two acts null and void and ultra vires to the Federal Constitution, then the Sarawak Barisan Nasional government needs to “apologise to the people of Sarawak.”

“It is time for the state gvernment to come clean and admit they allowed daylight robbery to be committed for the past 44 years. They need to prove their sincerity in claiming back what rightfully belongs to Sarawak. 

“Has the state BN government the political will to stand up to the prime minister and the federal government?

“Have they got the political courage to go up to their masters since they believe the acts are not applicable, Petronas should immediately cease operation in Sarawak waters?”

On March 2, Petronas announced profit of RM23.8 billion in 2016 and RM45.5 billion in 2017. – March 10, 2018.


PETROS dijangka raih pendapatan RM2 bilion setahun

SIBU: Pendapatan RM2 bilion setahun dijangka diperoleh kerajaan negeri melalui peningkatan pegangan ekuiti sebanyak 25 peratus dalam Loji Gas Asli Cecair Malaysia (MNLG) 3 di Bintulu.

Ketua Menteri, Datuk Patinggi Abang Johari Abang Openg, berkata perolehan dividen itu membantu kerajaan negeri mempercepatkan pembangunan infrastruktur di seluruh negeri, khususnya di kawasan pedalaman dan luar bandar.

“Ini baru MLNG 3, di MLNG1 dan MLNG2, kita memiliki 10 peratus pegangan (saham). Keseluruhannya, Sarawak ada sembilan loji MNLG. Kita akan berunding untuk mengambil (pegangan) sedikit demi sedikit.

“Itu sebab kita tubuhkan PETROS (Petroleum Sarawak Berhad) supaya bila kita ada syarikat minyak sendiri, kita boleh bekerjasama dengan PETRONAS. Kalau PETROS kuat, ia boleh jadi seperti PETRONAS,” katanya.

Beliau berkata demikian ketika merasmikan Seminar Pembangunan dan Kepimpinan Ketua Masyarakat dan Ketua Kaum Peringkat Negeri Sarawak 2018, di sini, hari ini.

Hadir sama Timbalan Ketua Menteri, Datuk Amar Douglas Uggah Embas.

Abang Johari yang Menteri Kewangan dan Perancangan Ekonomi Sarawak mendedahkan perolehan dividen itu membantu membiayai projek jalan pesisir sepanjang 900 kilometer yang sedang pembinaan jalanraya pesisir yang kini sedang giat dilaksanakan kerajaan negeri.

“Di jalanraya pesisir ini, ada beberapa jambatan panjang yang perlu kita bina di Sungai Batang Krian dan Sungai Batang Lassa. Ia membabitkan perbelanjaan tinggi, namun kita melaksanakannya kerana Barisan Nasional (BN) sentiasa mendengar denyut nadi rakyat.

“Kita juga mahu menggunakan hasil dari MLNG3 untuk membiayai Projek Grid Air Negeri bernilai RM7 bilion bagi membantu menyelesaikan masalah bekalan air yang masih banyak berlaku di pelbagai tempat di negeri ini,” katanya.

Beliau turut menyeru agar penduduk di Sibu memberikan sokongan kepada calon BN yang dipilih, sekali gus memastikan kemenangan besar dalam Pilihan Raya Umum Ke-14 (PRU14).

“Kita perlu memperkasa Sarawak dengan memenangkan calon BN kerana jika kita menang banyak kerusi, lebih mudah kita bersuara untuk menuntut kembali hak negeri dalam Perjanjian Malaysia 1963,” katanya.


Help us change Sarawak for the better – Abang Johari

A member of the public asks a question during the town hall session.

KUCHING: Chief Minister Datuk Patinggi Abang Johari Tun Openg called for Sarawakian to rally behind him and the state government to elevate the state to greater heights.

Abang Johari said measures and policies will be introduced to help change Sarawak for the better.

“All measures that we introduced are meant to benefit Sarawak. For example Petros, Development Bank of Sarawak (DBOS) and investing RM1 billion to improve the ICT infrastructure in the state,” he said at the townhall session with Sarawakians in West Malaysia at the Lan Berambeh programme held at the Putra World Trade Centre (PWTC) here today.

“We will from time to time look into other issues as well,” adding that these policies and measures were all meant to have Sarawakian as the custodian.

Abang Johari talking to the crowd during the townhall session.

On transportation, Abang Johari said the state government was looking into the possibility of being the first state to introduce green technology for the Light Railway Transit project which will connect Kuching, Serian and Bau.

“All this comes with the need for Sarawakians to be ready to embrace change,” he said.

Abang Johari also revealed that a new act ‘The Sarawak Multimedia Authority’ will be tabled at the next State Legislative Assembly (DUN) sitting in December, while the state is looking at using DBOS to repair 260 schools in rural areas in the next two years.

On another matter, Abang Johari revealed that he had the proposed a list of BN candidates for all 14 parliamentary seats when asked by a reporter after the townhall session.

“Yes, I have seen the list and we will let Barisan Nasional chairman Datuk Seri Najib Tun Razak decide,” said Abang Johari who also refused to reveal the names on the candidate list.

The townhall session opens the floor for Sarawakians in Peninsular Malaysia to pose questions to the chief minister and has been among the highlight of the Lan Berambeh programme since it was first held 10 years ago.


Bright chance of regaining seat

MIRI: Sarawak Barisan Nasional component parties must go all out to recapture the Miri parliamentary seat in the coming 14th general election.

Chief Minister Datuk Patinggi Abang Johari Tun Openg noted the seat was once a Barisan stronghold but was lost to the opposition for the first time in 2013.

He said with all four component parties – Parti Pesaka Bumiputera Bersatu (PBB), Parti Rakyat Sarawak (PRS), Progressive Democratic Party (PDP) and Sarawak United People’s Party (SUPP) – now fully recovered after being embroiled in internal conflicts, the chances of winning back the Miri parliamentary seat seemed bright.

“We must win the Miri parliamentary seat so that we can develop together for the future generation,” he said at the Chinese New Year dinner organised by SUPP Miri and Sibuti parliamentary liaison committee.

Abang Johari, who is also the state Barisan chairman, said the Miri community must think rationally during GE14 as it would determine the future of Miri as well as the development of Miri division.

“All four leaders in Sarawak Barisan component parties are Sarawakians, we will protect the state’s rights based on the constitution,” he added.

Meanwhile, Miri SUPP and Sibuti Parliamentary liaison committee chairman Datuk Lee Kim Shim said the party had formed an election committee and its election machinery was ready to move once campaigning starts.

“Together with our component parties PBB, PRS and PDP, we will make sure that we wrest the Miri parliamentary seat,” he said.

On another issue, Lee who is state Assistant Tourism, Arts and Culture Minister hoped that the state government would study the possibility of turning the Miri river from Pullman Hotel to Kampung Wireless into a waterfront that could attract tourists similar to the Kuching Waterfront.

He also appealed to the chief minister to consider making Miri City the headquarters of Sarawak-owned oil and gas company, Petroleum Sarawak Bhd (Petros).

“Miri has been the centre of the oil and gas industry for hundreds of years.

“It is hoped that Petros will play an active role in developing the oil and gas industry in Sarawak, particularly in Miri, thereby creating more jobs and opportunities for the locals,” he added. — Bernama


Latest Articles