Kuala Lumpur: The federal and Sarawak governments have agreed to Petronas and its subsidiaries retaining all existing contractual obligations, domestic and international, Prime Minister Anwar Ibrahim confirmed today.
In clearing the air over the dispute on Sarawak’s right to exploit oil and gas reserves in and around the state, Anwar told the Dewan Rakyat that the two governments also recognised the Petroleum Development Act 1974 as a federal law.
However, to fulfil the East Malaysian state’s aspirations in the oil and gas sector, it was agreed that the Distribution of Gas Ordinance 2016 (DGO) will come into force on March 1, Anwar said.
“The DGO will be read together with the PDA, and therefore Petros will act as Sarawak’s aggregator,” he said, referring to Petroleum Sarawak Bhd.
Last night, Sarawak premier Abang Johari Openg reiterated the state’s contention that it had regulatory authority over oil and gas activities within its territory.
His remarks were in response to a parliamentary reply earlier this month by Azalina Othman Said, the law and institutional reform minister, who said Petronas and its subsidiaries will not require a licence to operate in Sarawak.
She also said the companies will not be subjected to additional procedures beyond those stipulated in the Petroleum Development Act 1974.
Azalina said the agreement was reached between Abang Johari and Prime Minister Anwar Ibrahim during a meeting in January.
Abang Johari however disputed Azalina’s comments in relation to Sarawak’s position on resource ownership. He said the state’s position was clearly enshrined in the Federal Constitution and the Malaysia Agreement 1963.
Any extraction of oil and gas must first be approved by the state, he said.
Last year, Sarawak pressed for Petronas, the national oil company, to ink a deal that would make Petroleum Sarawak Bhd the sole gas aggregator in the state.
Abang Johari had also previously argued that Sarawak’s Oil Mining Ordinance 1958 – which formalised Sarawak’s right to exploit its oil and gas resources – remained valid and in force and that any entity engaging in resource exploration and extraction must adhere to it.
