Sarawak unhappiness with Petronas on display at transfer ceremony

THE undercurrent of Sarawak’s anger towards Petronas was on show at a domestic gas signing ceremony – transfer of stewardship of the distribution of domestic gas to state oil firm Petros – in Kuching today.

Deputy Chief Minister Awang Tengah Ali Hassan pulled no punches when he described speeches made by Petronas president and group CEO Wan Zulkiflee Wan Ariffin and Petros chairman Hamid Bugo as full of niceties.

Source: https://www.themalaysianinsight.com/s/218626

Possible for Kuching to have piped gas in 10 years

HOMES and industries in Sarawak’s capital city, Kuching, could have piped gas within the decade, state oil firm Petroleum Sarawak Berhad (Petros) chairman Hamid Bugo said today.

He, however, said it needs “the right and skilled” labour force.

Source: https://www.themalaysianinsight.com/s/218632

Bidayuh oil and gas veteran picked as Petros CEO, industry sources say

OIL industry veteran Saau Kakok is expected to head Sarawak-owned Petroleum Sarawak Bhd (Petros) after months of searching for a chief executive officer, industry sources say.

Saau, who was former special projects vice-president for Asia of the US-based independent oil company Hess Corporation, is the man Sarawak Chief Minister Abang Johari Openg has headhunted for the job and was not among the numerous applicants for the post, they said.

The 64 year-old is one of only a handful of Bidayuh oil and gas executives holding very senior positions in a multi-national petroleum company.

According to his profile on his LinkedIn page, he resigned from his vice-president position at Hess at the end of last year.

Abang Johari on Sunday said he has found “the right person for the job” and gave only one hint – that the person was a Bidayuh with experience in oil and gas industry.

The Bidayuh are the second largest of state’s ethnic tribes.

Petroleum-rich Sarawak formed Petros last year amid long-standing unhappiness over the 5% oil and gas royalty the state receives from the federal government. Sarawak has been demanding that the amount be increased to 20%.

The state government said Petros would be of “equal status” as national oil company Petronas and was meant to protect Sarawak’s interest in the industry by allowing it to participate in upstream oil and gas development, particularly in the exploration and extraction of oil and gas within Sarawak waters.

Oil and gas executives have told The Malaysian Insight that Saau was indeed picked for the job as the native of Ulu Padawan, located just outside Kuching the state capital, was a person with vast experience in the industry.

“It’s Saau. We are positive it’s him as he has been having a few meetings with Petros board chairman Hamid Bugo over the position this week,” an executive said.

Saau joined Hess in 2011 as vice-president of global new business development.

He completed his tertiary education at University of Malaya, graduating with honours in a Bachelor of Engineering degree in 1977.

Like many Sarawakians, he first joined the oil and gas industry via Shell.

His LinkedIn page stated his last position at Shell as vice-president of Shell EP International Ltd, a position he held from 2007 to 2009.

In Hess, Saau has held several positions including vice-president for Asia-Pacific, as a director in Hess Malaysia and Thailand Ltd, in Hess Oil & Gas Sdn Bhd and in Hess (Indonesia-South Sesulu) Limited.

He was with the London-based Hess (Indonesia-South Sesulu) Ltd from January 2014 to December 31, 2016.

Wilfred Nissom, one of his former teachers at the Dragon Secondary School (later renamed SMK Tun Abdul Razak), described Saau as “very sharp but quiet and humble”.

He also remembered Sauu as being a good athlete who had represented the school as a long-distance runner in inter-school sports meets.

The Malaysian Insight was also told by industry sources that the “humble” Saau had expressed that he was not good enough for the job and had asked Hamid to look for someone else.

Last November, Hamid said the Petros board was in the midst of screening 40 applications for the post that was advertised in local and national newspapers.

The other members of the Petros board are Bintulu Port Holdings CEO Mohammad Medan Abdullah, Sarawak Energy Bhd CEO Sharbini Suhaili, former Shell Gas & Power Malaysia managing director Heng Hock Cheng and Sarawak Public Works Department director Zuraimi Sabki.

All of them had served in various capacities in the oil and gas industry. – February 14, 2018.

Source: https://www.themalaysianinsight.com/s/37884

Petroleum Sarawak signs up for Petrotel’s expertise in oil and gas

STATE-OWNED fledgling oil and gas company, Petroleum Sarawak (Petros) has taken its first step into the business with the signing a memorandum of understanding with Petrotel Energy Oman LLC “to explore the possibility of co-operation to develop the downstream sector of oil and gas industries in Sarawak”.

International oil and gas company “with links to Sarawak”, South Sea Energy (SSE), is also a signatory to the MoU.

The signing in Muscat, Oman today was witnessed by Chief Minister Abang Johari Openg.

Chairman Hamid Bugo and board member Zuraimi Sabki signed for Petronas, president Lily Chin and executive director Tiong Kiong King for SSE, and chief executive Dr Anil Chopra and chief operating officer Mike Lucich for Petrotel.

The chief minister, who is on a working visit to Oman and the United Arab Emirates, had earlier witnessed the signing of an MOU between Petrotel and SSE on exploration and production rights in the Arab country.

Petrotel is described on its website as “a leader in oil and gas technology in all aspects of exploration and production with worldwide experience” which has worked on “more than 300 fields worldwide in over 30 countries”.

The Sarawak chief minister and his delegation, which included Deputy Chief Minister and Second Minister of Natural Resources Awang Tengah Ali Hasssn, State Secretary Mohammad Morshidi Abdul Ghani and Sarawak Energy chief executive officer Sharbini Suhaili, arrived in the Omani capital yesterday.

Later yesterday evening, the chief minister and his entourage were shown an overview of the prospects and possibilities of cooperation in the oil and gas sector in the sultanate by SSE.

On Monday, while in the oil refining town of Miri, Abang Johari said Petros would be an active player in the oil and gas industry in two years.

The company was formed in August last year to look after the state’s interest in oil and gas discovered and mined in Sarawak.

Petros is still on a head hunt for a chief executive officer. – January 17, 2018.

Source: https://www.themalaysianinsight.com/s/33006

No more business as usual by July, Sarawak CM tells Petronas

SARAWAK Chief Minister Abang Johari Openg has told Petronas it cannot operate as usual from July, adding that the national oil company has not done enough to develop the country’s largest state.

His remarks, carried by satellite TV operator Astro tonight, underscore the state’s move to be independent of Putrajaya ahead of the 14th general election, widely expected to be called next month.

“Petronas must acknowledge the fact that it is our right for them to align with our laws,” the chief minister said in an interview on Astro Awani.

Last night, the chief minister, at the launch of the state-owned Sarawak Petroleum Bhd (Petros), said by July, Sarawak will assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in the state, and that all individuals and companies wishing to do business in the industry, including Petronas, must have the necessary licences, permits, leases and approvals from the state government.

The legal requirements are from either the Oil Mining Ordinance 1958 or Gas Distribution Ordinance 2016.

Prior to this, Petronas, vested with the powers under the Petroleum Development Act 1974 (PDA), dictated all aspects of the oil and gas industry in the state.

Petronas negotiated and awarded all the power-sharing contracts and its contractors.

Abang Johari said under the new operating condition, as Sarawak exercises its constitutional rights over the two resources, some Petronas decisions are also no longer for the company to make alone.

He gave the appointment of contractors as an example.

“They can’t appoint their contractors themselves. They must get their contractors and sub-contractors who are registered with us,” he said, referring to the new legal requirement for oil and gas companies to have licences, permits, leases and approvals from the state government.

Abang Johari said Sarawak never had a say in the appointment of contractors before.

“We don’t have a say especially in the question of the participation of our private sector.”

He said while the national petroleum company has posted billion of ringgits in profits, it is not doing enough to channel some of the money to develop the state.

“The understanding (for the PDA) was that, Petronas would use part of its revenue to develop the state. Over the years, you can see what has happened.

“Petronas has got lots of revenue, but our perception is that they concentrated their projects in the peninsula, while the state is struggling to get money to develop basic infrastructure.

“Fair enough, it has to be shared throughout the country, but there must be the equitable allocation of resources to Sarawak.”

He said Sarawakians can also see and think.

“Sarawakians are looking at the Twin Towers, and Sarawakians are also looking at all the bailouts of the federal government… and we can think that part of the money comes from Petronas.”

He said Petronas is not doing enough to help develop the state.

“Yes, they have their plant in Bintulu. That is their investment, and we have a certain equity.

“But what must be done is, there must be equitable jobs to be given to Sarawak companies.”

Despite the warning of change, Petronas said the company “is committed to supporting Sarawak’s aspirations to actively participate in the state’s oil and gas industry, in line with the current framework of the PDA”.

In offering its congratulations to the Sarawak government over the launch of Petros, and welcoming the participation of the state petroleum company in the oil and gas sector, Petronas said it is looking forward “to continue collaborating with the state for mutual benefit”. – March 7, 2018.

Source: https://www.themalaysianinsight.com/s/41654

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.

Source: https://www.themalaysianinsight.com/s/42196

Sarawak leaders divided over state’s actions to defend its rights

IN March last year, the Sarawak government established the state’s own oil and gas exploration company, Petroleum Sarawak Bhd (Petros), modelled after national oil company Petronas.

While many Sarawakians were trying to figure out what role the company would play alongside Petronas, which has absolute monopoly over the state’s carbon resources, alarm bells were reported to be ringing in the Twin Towers and Putrajaya on the Sarawak government’s intent.

Source: https://www.themalaysianinsight.com/s/131882

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

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

Sarawak eases push for 20% oil and gas royalty

SARAWAK Housing Minister Dr Sim Kui Hian today said the state has eased on its push for a 20% increase – from the current 5% – of the oil and gas royalty.

It would instead focus on getting state petroleum company Petros, off the ground and the potential revenue it could generate.

“We are no longer talking about oil royalty,” the Sarawak United People’s Party (SUPP) president said while speaking to reporters at the party’s Chinese New Year open house in Kuching.

Echoing Chief Minister Abang Johari Openg’s earlier statement that the rights to prospect and mine for all mineral and natural resources in Sarawak, including oil and gas, are rights of the state as spelt out in the federal constitution, Dr Sim also reiterated “all the oil (and gas in the state) belongs to Sarawak”.

“What is ours, is ours. Its in the constitution,” he said in reference to the chief minister’s statement in a live interview over TV1 on Tuesday.

Abang Johari, in explaining why Petronas must obtain a prospecting license if it were to operate in the state, said while the federal constitution stipulates that the development of mineral resources falls under federal purview, it is however subject to item 2(c) of the state list when it comes to Sarawak.

According to item 2(c), permits and licences for prospecting for mines, mining leases and certificates are state matters.

The needs for the state permits and certificates are under the Sarawak Oil Mining Ordinance 1958.

“This means the state has the power to prospect and mine for oil and gas in the state just like Petronas,” the chief minister said.

“If Petronas wants to prospect for oil and gas in the state, they are subject to item 2(c) of the federal constitution and the licence must be issued by the state.

“I (only) work within the perimeters of the law and the federal constitution is supreme law.”

In his Chinese New Year message, the chief minister made it clear Petros will not “just be another production sharing contract company (PSC) but one that will operate alongside Petronas and play an active part in the downstream activities of the oil and gas industry in Sarawak”.

Abang Johari said Petros be an active player in the oil and gas industry alongside Petronas within two years.

With the prospect of a higher revenue Petros could potentially generate from newly discovered gas fields and re-exploiting old oil fields with new technologies, Dr Sim took a swipe at Harapan’s New Deal manifesto for Sarawak and Sabah and the promise to give Sarawak and Sarawak the 20% royalty as demanded.

“They (Harapan) only want to give us 20%. DAP wants to kongsi (share) Sarawak’s resources.

“Petros is just a beginning. The best is yet to come,” the cardiologist turned politician said. – February 16, 2018.

Source: https://www.themalaysianinsight.com/s/38221

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