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

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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