TheMalaysianInsight.com

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

Sarawak CM dismisses claim Petros will be another 1MDB

SARAWAK Chief Minister Abang Johari Openg has dismissed allegations published online that state oil company, Petroleum Sarawak Bhd (Petros), was created as a vehicle to siphon Sarawak oil money away.

“No such thing. That (claim by the) website – aogm.net – is malicious with malicious intentions,” he said when opening Brooke Dockyard and Engineering Works Corporation’s second fabrication yard in Demak and the loadout of Petronas Carigali’s Bokor D substructure in Bako, 40km from Kuching.

Source: https://www.themalaysianinsight.com/s/137749

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 hints of plans to claim more oil, gas revenue

CHIEF Minister Abang Johari Openg has given another hint that Sarawak will muscle in to claim more revenue from oil and gas for its coffers.

“I already have ideas (on generating more income), but I cannot reveal them today,” said Abang Johari, who is also president of Parti Pesaka Bumiputera Bersatu (PBB), the second-largest party in the ruling Barisan Nasional coalition, when jointly opening the PBB Women and Youth wings’ triennial delegates’ conference in Kuching today.

“We have oil, we have gas, but we only see other people benefiting from them,” he said in an apparent reference to the Petroleum Development Act 1974 (PDA), which takes away gains from the two valuable resources from the state, and the highly contentious royalty payment arrangement, where the federal government gets 95% of revenue from the state’s oil and gas.

The PDA, a law passed by Parliament, gives Petronas the sole right to the exploration and exploitation of oil and gas, whether onshore or offshore, and “the entire ownership, and exclusive rights, powers, liberties and privileges” relating to the resources.

Having already demanded that state gets an increase in royalty to 20%, Abang Johari has spoken about plans to curtail the national petroleum company’s unbridled operations in Sarawak.

They include making Petronas obtain mining permits, as the rights to issue mining leases still rest with the state under the Malaysia Agreement 1963, and the formation of Petroleum Sarawak, a state oil company “to look after the interests of the state”.

Sarawak has also demanded that it gets the first right of refusal in any new development of oil and gas fields.

Abang Johari said he was “very confident” of making Sarawak a developed state by 2030.

“We have set a target. We can meet that target if our revenues are increased… so that we can better develop our cities and rural areas.”

He said this confidence was the reason why he dared disclose plans to build mega projects, like the light rail transit for Kuching and Samarahan, the building of an “internet backbone” in rural Sarawak and the building of a water grid without federal assistance.

The water grid, which involves laying a huge water main through the entire length of the state, could cost between RM7 billion and RM8 billion.

Abang Johari said when such major infrastructure was in place, “then, we can call Sarawak a developed state”.

Gerald Rentap Jabu, the son of former deputy chief minister Alfred Jabu, takes over the helm of the PBB Youth wing from Works Minister Fadillah Yusof, who has stepped down due to his age.

State Welfare, Community Wellbeing, Women, Family and Childhood Development Minister Fatimah Abdullah has been made president of the party’s Women’s wing after Empiang Jabu, who is Gerald’s mother, stepped down after 11 years at the helm.

Both Gerald and Fatimah won uncontested. – February 9, 2018.

Source: https://www.themalaysianinsight.com/s/37040

Group wants Sarawak to end oil, gas talks with Petronas

THE Sarawak government must end the ongoing talks between state oil company Petroleum Sarawak Bhd and Petronas over a new oil and gas sharing deal.

State rights group Sarawak Association for Peoples’ Aspiration (Sapa), said the state government must stand up to its rights over oil and gas in the state.

Source: https://www.themalaysianinsight.com/s/99118

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

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

Sarawak BN must fight for Miri, says Abang Johari

SARAWAK’S Barisan Nasional (BN) components must go all out to recapture the Miri parliamentary seat, a former BN stronghold that was lost to the opposition in 2013, in the coming 14th General Election (GE14).

Chief Minister Abang Johari Openg said with all four BN 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 from their embroilment in internal conflicts, chances of winning back the Miri parliamentary seat seemed bright.

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

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

“All four leaders in Sarawak’s BN component parties are Sarawakian. We will protect the state rights based on the constitution,” he said.

SUPP Miri and Sibuti parliamentary liaison committee chairman Lee Kim Shim said SUPP had formed an election committee for GE14, with election machinery ready to move once the campaigning started.

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

On another issue, Lee, who is state assistant minister for tourism, arts and culture, hoped that the state government would study the possibility of turning the Miri River winding from Pullman Hotel to Kampung Wireless to be turned 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 Berhad (Petros).

“Miri has been the centre of the oil and gas industry for over 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, creating more jobs and opportunities,” he said. – Bernama, February 19, 2018.

Source: https://www.themalaysianinsight.com/s/38641

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

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