SUPP’s proposal to make every Sarawakian a Petros shareholder a ‘bad idea’

SARAWAK PKR vice-president See Chee How said Sarawak United People’s Party’s (SUPP) proposal to make all Sarawakians shareholders in state oil company Petroleum Sarawak Berhad (Petros) is “a bad idea”.

See, the Batu Lintang assemblyman, dismissed the proposal passed at the party’s annual delegates conference in Kuching yesterday as “just a populist idea to appeal to the urban folk”.

Source: https://www.themalaysianinsight.com/s/87307

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.

Source: https://www.themalaysianinsight.com/s/56436

Sarawak win over Petronas not certain yet

SARAWAK was quick to celebrate the Federal Court’s dismissal of Petronas’ legal challenge to obtain ownership rights over all petroleum resources in the country, even as the oil company’s lawyer cautioned that the fight was not over.

Chief Minister Abang Johari Openg said the state will now enforce all state laws regulating the oil and gas industry which includes requiring Petronas to obtain approval for its activities in Sarawak.

He said all companies, including Petronas, must by July 1 have the necessary licences, permits, leases and approvals required under either the Sarawak Oil Mining Ordinance (OMO) 1958 or the Gas Distribution Ordinance 2016.

Abang Johari, in a statement responding to the Federal Court’s decision, said it had paved the way for the state government to enforce its state laws, such as the OMO.

He also said state oil company Petroleum Sarawak Berhad (Petros) will be delegated the appropriate powers to implement the OMO.

However, Petronas’ lead counsel Malik Imtiaz Sarwar said the apex court had only ruled that the case did not come under its jurisdiction and had asked for it to be heard in the High Court instead.

Malik was reported by The Malay Mail saying that the Federal Court’s decision was on a “procedural matter” and that the issue was “still very much alive, not been decided in any way”.

The merits of the case have not been decided, he added.

In addition to seeking ownership of the country’s petroleum resources, Petronas also wants the court to declare the Sarawak OMO as overridden by the Petroleum Development Act 1974 (PDA). The OMO was drafted before Malaysia was formed.

The OMO was used by the Sarawak government to inform Petronas that the state would regulate its upstream oil and gas activities from July 1.

Abang Johari has previously said that the OMO would be amended to update its provisions, with a bill to be tabled at the state legislative assembly next month.

Malik today said the federal court’s did not make any decision on the PDA or the OMO, adding that he would wait for further instructions from Petronas before any filing at the High Court.

Bandar Kuching MP Kelvin Yii also expressed caution over any move to celebrate the Federal Court decision today.

In a Facebook post he said Sarawak had to “keep our eyes on the ball and not get ahead of ourselves”, adding that he expected Petronas to take the matter to the High Court.

“While I congratulate the legal team for their efforts and success, there is still an ambiguity in law and technically the status quo still stands.

“PDA 1974 wasn’t repealed, nor was there a ruling to say it does not apply in Sarawak. The legal argument is not about ‘ownership’ but more on regulatory powers of the upstream activities in Sarawak,” Yii said. – June 22, 2018.

Source: https://www.themalaysianinsight.com/s/56201

Sabah politicians to intervene in Petronas suit

SABAH politicians are eager to intervene in Petronas’ suit to lay exclusive claim on the country’s petroleum resources and to be the regulator of the upstream industry.

Sabah, a petroleum-rich state, stands to lose its rights if the national oil company wins in its suit, said Sabah Star president Jeffrey Kitingan.

He said that while Petronas was relying on the Petroleum Development Act 1974 as the point of its argument, this law was in fact “unconstitutional”.

“The act goes against the federal constitution, which accords the rights of natural resources to the respective states.

“If the state government does not act, Sabah stands to lose all its rights on the oil if Petronas wins its suit,” he said during the Double Six Commemoration in Sembulan, Kota Kinabalu, today.

Petronas earlier this week filed an application before the Federal Court seeking a declaration that it is the exclusive owner of petroleum resources in Malaysia, including in Sarawak.

It is also seeking the apex court’s declaration that it is the regulator for the upstream industry throughout the country.

The hearing will be on June 12 in at the court in Putrajaya.

The move comes as Sarawak prepares to assume full regulatory authority over upstream and downstream aspects of the oil and gas industry in the state from next month through Petroleum Sarawak Bhd (Petros), a state-owned oil and gas exploration firm formed last year and officially launched in March.

Jeffrey said Gabungan Sabah aims to raise funds to engage lawyers to challenge Petronas’ bid.

He said that the state’s citizens, as stakeholders of Sabah’s natural resources, could take action if the state government did not.

Sabah Progressive Party president Yong Teck Lee said a team of lawyers were already working on building a case against Petronas. – June 6, 2018.

Source: https://www.themalaysianinsight.com/s/52969

Petronas’ suit a desperate act to hang on to Sarawak oil rights, says activist

PETRONAS’ legal action seeking the Federal Court’s declaration on the Petroleum Development Act 1974 (PDA) shows how desperate it is to hang on to the state’s oil and gas resources, one of Sarawak’s more vocal political and rights activists Lina Soo said.

“They must have known that they don’t have control over our oil and gas, so they try to get the Federal Court to shut us up,” Soo, who is also the president of the State Reform Party Sarawak (Star) political party said in reaction to the national oil company asking the apex court to declare that it is the exclusive owner of petroleum resources in Malaysia, including Sarawak, and that it is the regulator for the upstream industry throughout the country.

Soo said Petronas’ legal action reflected Prime Minister Dr Mahathir Mohamad’s long-standing position (when he was prime minister from 1981 to 2003) not to accede to Sarawak and Sabah’s demand for a greater share of its oil and gas resources.

“They just want to avoid paying the 20% oil royalty (Pakatan Harapan promised in its election manifesto) and they will try every means not to pay.”

Soo said Sarawakians should not be surprised if the new PH government would use the RM1 trillion debt as an excuse not to increase the royalty.

The two Borneo territories currently are only getting 5%.

In March, Sarawak Chief Minister Abang Johari Openg said the PDA and the equally controversial law, the Territorial Sea Act 2012 (TSA), are not relevant in Sarawak.

He said since both were federal laws and for any federal law to be implemented in the state, the legislative assembly has to ratify them.

Neither the PDA nor the TSA were ever ratified by the assembly.

“Any law that is ultra vires the constitution under Article 4 of the federal constitution is void,” he said.

Sarawak has also warned all companies in the state’s oil and gas industry and companies intending to do prospecting and mining work to have the necessary licences, permits, leases and approvals required under either the Oil Mining Ordinance or the Gas Distribution Ordinance from July 1.

The state’s newly formed oil company, Petros, will from July 1 also assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in the state from Petronas.

The state government has yet to react to the Petronas action and the state government spokesman, Assistant Minister in the Chief Minister’s Office Abdullah Saidol, said the chief minister will issue a statement on this matter “soon”. – June 4, 2018.

Source: https://www.themalaysianinsight.com/s/52409

In challenge to Sarawak, Petronas wants court to declare it owns all national oil resources

NATIONAL oil company Petronas is asking the Federal Court to declare that it is the exclusive owner of petroleum resources in Malaysia, including in Sarawak.

It is also seeking the apex court’s declaration that it is the regulator for the upstream industry throughout the country.

In a statement, the company said it filed an application before the Federal Court today seeking these declarations based on the Petroleum Development Act 1974 (PDA).

“Petronas believes that the determination of the Federal Court would help provide clarity on its rights and position under the PDA.

“Petronas remains committed to supporting Sarawak’s aspiration to participate in the oil and gas industry in the state for as long as it is within the framework of the PDA,” the statement issued by Petronas’ group strategic communications said.

This move comes as Sarawak prepares to assume full regulatory authority over upstream and downstream aspects of the oil and gas industry in the state from next month.

In March this year, Chief Minister Abang Johari Openg said that Sarawak had regained all the rights to prospect, mine and develop oil and gas in the state, meaning that oil companies, including Petronas, wishing to operate in the state would have to secure a prospecting licence from the state government.

Sarawak Pakatan Harapan leaders, however, disagreed with Abang Johari, saying the state could not reclaim such rights until the PDA and other relevant federal laws were amended.

Petroleum Sarawak Bhd (Petros), a state-owned oil and gas exploration firm, was formed last year and officially launched in March. Abang Johari had said that Petros would not be a partner of Petronas and would instead have the “same status” as the national oil company.

The issue of Sarawak’s rights to its oil resources has long been a contentious one, with the state demanding more than the 5% oil and gas royalty it receives from the federal government each year.

The PH election manifesto for GE14 promised to increase the royalty to 20%. – June 4, 2018.

Source: https://www.themalaysianinsight.com/s/52330

PKR wants assembly to discuss Sarawak’s oil and gas rights

PKR Sarawak vice-chairman and Batu Lintang assemblyman See Chee How wants the state assembly sitting to discuss the state’s oil and gas rights.

See said the special assembly sitting would make clear Sarawak’s collective stance with regard to three controversial laws – the Territorial Sea Act 2012, the Petroleum Development Act 1974, and the Tripartite Agreement signed between the federal government, state government and Petronas – that the chief minister had dismissed as “irrelevant”.

See said Chief Minister Abang Johari Openg’s many statements on the invalidity of the TSA, PDA and the agreement since the March 6 launching of Petroleum Sarawak Berhad (Petros) “make it sounds so simplistic”.

At the launch of Petros, the chief minister said the state had regained all the rights to its resources and that any person and company wishing to do business in the state’s oil and gas industry must have the necessary licences, permits, leases and approvals required under either the state’s Oil Mining Ordinance or the Gas Distribution Ordinance.

In a media conference two days later, Abang Johari said the TSA and PDA were “irrelevant” as they had violated Sarawak’s rights to its natural and hydrocarbon resources under the federal constitution. “any law that is ultra vires (beyond the powers) of the constitution under Article 4 of the federal constitution is void,” he said.

The chief minister had also asserted the state’s rights to its oil and gas were never surrendered upon the formation of Malaysia in 1963 and therefore the issuance of permits and licences for mines, mining leases and certificates in relation to the prospecting, mining and development of our petroleum resources were still intact.

The issuance of permits and licences were drawn up during the rule of the White Rajah and were later incorporated under Item 2(c) of the state list under the ninth schedule of the federal constitution.

“The chief minister had evoked a lively debate with his unequivocal announcement that Sarawak will assume full regulatory authority over its oil and gas upstream and downstream industry by July, at the launching of Petroleum Sarawak Berhad (Petros) on March 6.

“Elected representatives, aspirants vying for offices in the coming general election, academicians and political analysts have raised some legal but mostly political arguments in the tussle which by far have been entertaining and enlightening,” said See.

But he said it is the duty of the state leaders to protect the interests of Sarawak’s prized resources true to the spirit of “Sarawak First” and “Sarawakians First”.

“The special sitting of the Sarawak legislative assembly will provide a platform for the differing legal and political opinions, propositions and solutions to be deliberated, considered and adopted in order that Sarawak may speak and present itself with one unified voice.”

He said it would not be similar to the legislature’s motion on the request for 20% petroleum royalty, which was unanimously passed on May 7, 2014.

See said the chief minister is doing right to take a step further to pursue and assert the state’s autonomous rights over the valuable resources of oil and gas lying within the territorial boundary of Sarawak.

“I’m all for getting these things back but they should not be decided by himself or his cabinet.

“They must be brought to the assembly for a consensus.”

See also said the silence of Prime Minister Najib Razak and federal leaders “to Sarawak’s quest which is moving the earth under Sarawakians’ feet” was disconcerting.

“They are calm and relaxed, as if giving a nonchalant shrug, dismissing the expedition of the charging knights as a futile exercise.

“I am uneasy, and expecting the worst to come after the general election, as I think the stance of the federal government can be deciphered from the response of Petronas,” he said.

In a short statement to welcome and congratulate the setting up of Petros, Petronas said it was committed to supporting the state’s aspirations to actively participate in the state’s oil and gas industry “in line with the current framework of the Petroleum Development Act, 1974”.

“Despite what the chief minister and all other Sarawakians have said, Petronas is cool, referring us to look at the framework of the Petroleum Development Act, 1974.” – March 27, 2018.

Source: https://www.themalaysianinsight.com/s/45349

Political party pledges to dog Sarawak CM on pledge to return rights

A NON-ALIGNED Sarawak political party says it is closely monitoring the actions of Chief Minister Abang Johari Openg following his pledge to get Putrajaya to return all the state’s lost autonomous rights as spelt out in the constitution and the Malaysia Agreement 1963.

At the launch of state-owned petroleum company Petroleum Sarawak Bhd (Petros) on March 6, Abang Johari had said the state  would “assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in Sarawak” by July.

That was understood by many in Sarawak to mean that national oil company Petronas has lost its absolute right to mine and develop oil and gas in the state.

Abang Johari had said the state retained its rights to oil and other resources even after Malaysia Day.

The chief minister in later statements had also said the two laws, the Petroleum Development Act 1974 – a law that gives Petronas all prospecting rights to mine and develop oil and gas in the country – and the Territorial Sea Act (TSA) 2012 had violated Sarawak’s rights in the federal constitution and was also legally null and void as it had also never been ratified by the state legislative assembly.

The TSA reduced the state’s sea boundary from the normal 12 miles to a mere 3 miles, an act seen by Sarawakians as a move by the federal government to seize the state’s oil and gas fields offshore.

Parti Bansa Dayak Sarawak Baru (PBDSB), whose political agenda is the advancement and protection of the Dayaks – the state’s largest communal group – said there should not be any further excuses in prolonging the recovery of those lost rights.

“We want him (Abang Johari) to hold on to the promises he had made,” party president Cobbold John said today.

PBDSB is not a member of the Barisan Nasional ruling bloc nor the opposition Pakatan Harapan.

Cobbold said if Abang Johari’s legal arguments are right, then there should not be any “obstacles in the way of Sarawak’s autonomous rights to be returned, as how it was initially stipulated legally in Malaysia Agreement 1963 (MA63)”.

He also suggested Sarawak lawmakers pore through in detail all the amendments that had been made and take the necessary actions if the federal government had violated the state’s rights or what were agreed in the MA63.

“As such, PBDSB shall continue to monitor and voice out where necessary on Sarawakians’ rights, especially when promises for such rights was made by the chief minister openly.

“PBDSB shall hold on to the promises which was made not only by the Sarawak chief minister but the entire Sarawak state cabinet and assemblymen to ensure that Sarawak has its rights returned as promised.” – March 22, 2018.

Source: https://www.themalaysianinsight.com/s/44389

Malaysia’s debt profile can mitigate currency, interest rate shocks

MALAYSIA’s debt profile, mainly funded by the ringgit, acts as mitigation against currency or interest rate shocks.

Moody’s Investors Service sovereign risk group assistant vice-president Anushka Shah said the debt profile factored in Malaysia’s A3 rating.

“The rating is underpinned by strong growth, large and diverse economic structure and ample natural resources. Malaysia is also one of the fastest-growing A-rated sovereigns,” she said at Moody’s Media Roundtable: Inside Asean – Spotlight on Malaysia, in Kuala Lumpur, today.

However, Anushka said, there were concerns Malaysia’s government debt to gross domestic product of about 51% was higher than the 41% median of other A-rated sovereigns. 

“Other concerns include the declining growth rate of the working-age population and downside global risks such as trade protectionism,.

Anushka said Malaysia’s large buffer of foreign-exchange reserves could also mitigate external vulnerabilities.

“The government is maintaining its fiscal deficit reduction stance and committed to a reform policy agenda,” she said.

On the impact of 1Malaysia Development Bhd debts on the country’s rating, she said, the current probability of debt crystallisation from 1MDB was low and was not viewed as a risk to Malaysia’s fiscal position.

Meanwhile, on Petroleum Sarawak Bhd (Petros) starting oil and gas (O&G) exploration this year, Moody’s vice-president Vikas Halan said it was too early to quantify the impact.

“We do not how this will pan out but we see that Petronas won’t be much impacted. It is too early to say but our base case is no change in legal status of Petronas as the exclusive explorer and owner of the (oil) resources,” he said. 

Sarawak Chief Minister Abang Johari Tun Openg recently said Petros would kickoff its exploration activities in Miri this year after the state assumed full regulatory control over both upstream and downstream O&G activities. 

“For us, it is wait and see (the impact). Moving forward, all exploration will come under this company but nothing that Petronas is producing will go away,” said Vikas, adding that, it would be better to have an open industry. – Bernama, March 21, 2018.

Source: https://www.themalaysianinsight.com/s/44310

Sabahans wait to see if Najib will keep promises on state rights

THE return of Sabah’s lost rights will be on the minds of many Sabahans as Prime Minister Najib Razak, who had vowed to return them, begins his two-day visit to the state tomorrow.

This could be Najib’s final visit to Sabah as prime minister ahead of the 14th general election which is speculated to be held before June, although the Barisan Nasional government’s mandate expires in August.

Sabah’s opposition leaders, however, believe Najib will keep the state waiting for any news on the return of special rights due to the state under the Malaysia Agreement 1963 (MA63) .

To them, his promises are merely election ploys and they see no reason for delays.

“Najib has come here so many times and all he had to do was just return our lost rights. What is there that is holding him back? 

“Everything is laid out clearly in the Federal Constitution,” said Lajim Ukin, the president of Parti Harapan Rakyat Sabah, one of the four parties in the Sabah opposition alliance, United Sabah Alliance.  

The restoration of state rights under MA63 has become a common call for parties on both sides of the political divide in Sabah and the hottest topic is the state’s 40% revenue entitlement.

A fact-finding groups formed by the government called the MySabah group found the federal government had halted payments of the entitlement since 1974.

The 40% entitlement was the reason why Sabah’s leaders had agreed to form the Federation of Malaysia in 1963, along with Sarawak, Malaya and Singapore, which broke away two years later.

Over time, Sabah’s political leaders said they have seen the state gradually cede its executive powers to the federal government in many areas ranging from oil resources, to education, power generation and other rights.

Sabah Star leader Dr Jeffrey Kitingan said Sabah suffered from a lack of development and had a higher poverty rate as a result of the erosion of state rights.

He said this was due to the lack of federal funds being put back into the state, despite Sabah contributing a sizeable amount to federal coffers from its natural resources.

Parti Warisan Sabah treasurer Terrence Siambun, meanwhile, said Najib should deliver his promise with no strings attached.

“The thing about MA63 is beyond politics. BN has been in power for over 20 years in Sabah but only made little effort to restore our rights.

“But now the prime minister is now going around making this promise just because the election is around the corner. If he is truly sincere, he should just implement our rights and not allow matters like the MA63 to be used as election bait,” he said.

The call for a return of state rights has gained political traction since the last two elections and Najib in his visit to Sabah has repeatedly promised their return.

Political observers expect Najib to announce some progress now that neighbouring state Sarawak has gone ahead to gain control of its upstream and downstream oil and gas industry thought state oil company Petros.

Sabah Umno leader Anifah Aman, who is also the foreign affairs minister, recently piled pressure by declaring he would leave Umno and refuse any federal cabinet post if Najib failed to deliver his promises on MA63. – March 20, 2018.

Source: https://www.themalaysianinsight.com/s/44097

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