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

Oil royalty issue won’t sway Sarawak voters, says Uggah

BARISAN Nasional is confident that the issue of oil royalty harped by Pakatan Harapan ahead of the 14th general election will not sway voter sentiment in Sarawak, said Douglas Uggah Embas.

The deputy chief minister said the promise to grant 20% royalty to Sarawak was an old one that was recycled by the opposition.

“This is an old issue, full control over the oil and gas industry in Sarawak has been given to the state government, we will get returns of more than 20 per cent (of the royalty),” he said after officiating the rabies mass vaccination programme in Miri today.

Uggah, who is also Parti Pesaka Bumiputera Bersatu (PBB) deputy president, said voters in Sarawak were wise enough to judge for themselves the state government’s efforts of reclaiming Sarawak’s rights as stipulated in the federal constitution.

On Tuesday, Chief Minister Abang Johari Openg announced that Sarawak would assume full regulatory control over the state’s oil and gas industry by July as part of the devolution of powers from the federal government.

Abang Johari made the announcement when he launched Petroleum Sarawak Berhad (Petros) and assured that Sarawak would exploit its natural oil and gas resources as provided for under the federal constitution.

He said the devolution of powers was in keeping with the agreement by Prime Minister Najib Razak to return to Sarawak the powers provided for in the Malaysia Agreement 1963 that had been inadvertently eroded over the years.

Sarawak Pakatan Harapan chairman Chong Chieng Jen, when launching the first phase of the opposition pact’s GE14 manifesto recently, was quoted as saying that the coalition would increase the oil royalty for Sarawak to 20% should they win the election. – Bernama, March 11, 2018.

Source: https://www.themalaysianinsight.com/s/42392

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

Abang Jo does not understand the law, says DAP

DAP today told Sarawak Chief Minister Abang Johari Openg that his statement yesterday claiming the Petroleum Development Act 1974 (PDA) and the Territorial Sea Act 2012 (TSA) were “null and void” showed his ignorance of the country’s legal system.

“He can repeat such claims another 100 times, but as these two laws have not been repealed or amended to exclude their application to Sarawak, or declared unconstitutional by the Federal Court, Abang Jo’s (Abang Johari) claim remains mere hot air, an act of ‘shiok sendiri’ (self-indulgence),” Sarawak DAP chairman Chong Chieng Jen said.

“Under our legal system, any law passed in Malaysia and duly gazetted to come into force is deemed good until it is repealed or the Federal Court declares it unconstitutional and null and void.

“Other than the Federal Court, no one, not even the prime minister, can declare a law passed in Parliament to be null and void,” Chong, who was also the Bandar Kuching MP, said, as a war of words broke out between state Tourism Minister Abdul Karim Hamzah and DAP over the chief minister saying yesterday that the two laws were “not relevant” in Sarawak.

Karim had criticised the opposition party for its scorn of Abang Johari’s effort to reclaim the state’s rights over its oil and gas.

DAP, however, said they were merely calling a spade a spade.

“Despite the self-declared rights of Abang Jo, the cold hard facts remain.”

“Sarawak’s entitlement to oil and gas royalties remains a meagre 5%; the remaining revenues generated from the exploration of oil and gas remain with the federal government and Petronas.

“The ultimate ownership and control of the oil and gas industry in Sarawak remains with Petronas and the prime minister; all Petronas pump stations will remain with Petronas and will not be converted to Petros pump stations.

“These are the facts,” Chong said.

“As such, I call upon Karim and Abang Jo to be truthful to the people of Sarawak and not disguise the continued exploitation of our resources by the BN government with laughable rhetoric like Abang Jo’s pronouncement that the PDA and TSA are ‘null and void’.”

The PDA gives Petronas absolute ownership and the exclusive rights, powers, liberties, and privileges to the exploration and exploitation of petroleum resources, both onshore or offshore, in the state.

The TSA reduces the state’s sea boundaries and territorial jurisdiction from 12 nautical miles offshore to three, an act which Sarawakians have long accused the federal government of using to plunder the state’s offshore oil and gas resources.

The Sarawak chief minister had said the PDA and the TSA were ‘null and void’ because they violated the state’s rights in the federal constitution.

The laws have been endorsed by the state legislative assembly and the Conference of Rulers, as required by law. – March 9, 2018.

Source: https://www.themalaysianinsight.com/s/42036

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

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