Awang Tengah: OMO amendment is to assert state’s rights over its oil, gas resources

Datuk Amar Awang Tengah Ali Hasan

KUCHING, July 10: The Oil Mining (Amendment) Bill, 2018 (OMO) is meant to realise the aspirations of the people and to assert the state’s rights over its oil and gas resources, said Second Minister of Urban Development and Natural Resources Datuk Amar Awang Tengah Ali Hasan today.

In tabling the Bill at the Sarawak Legislative Assembly sitting today, he explained that the move was to update several provisions and to bring the ordinance to be in line with current practices and operations in the oil and gas upstream sector.

“The Sarawak government wants to ensure that the aspirations of the people are realised and would continue to fight for the state’s rights to the oil and gas obtained from our land, both onshore and offshore.

“The amendments would create a more effective regulatory framework for the upstream and downstream sectors with the enforcement of the Distribution of Gas Ordinance, 2016 (DGO),” he told the august House.

He said once the Bill was passed, the state would be able to strengthen its regulatory controls over the exploration and prospecting for petroleum (which by definition includes ‘natural gas’) and the mining thereof on the land in Sarawak, both onshore and offshore in the Continental Shelf.

Sarawak would then expect national oil giant Petronas to succumb to the authority vested in it.

“I must state categorically that with regards to Section 8 of the Petroleum Development Act, 1974, Petronas is not exempted from complying with OMO or the Land Code when Petronas or its contractors undertake exploration, prospecting and mining for petroleum in Sarawak,” stressed Awang Tengah.

Petronas, as a national oil company, must abide by the state laws, particularly the OMO and the Land Code, when operating in Sarawak, he emphasised.

“The people of Sarawak want Petronas to respect our state laws and their aspirations for better regulatory control over the exploitation of our oil and gas as well as for a more equitable and just share of the returns and benefits from the oil and gas obtained from Sarawak territory.”

Awang Tengah said the Sarawak government was prepared to establish a regulatory framework for the exploration, prospecting and mining for oil and gas (O&G) in Sarawak that would not undermine Petronas’ operations and investments.

However, Petronas must demonstrate its willingness to respect and comply with Sarawak’s laws, he pointed out.

“In addition, Petronas should show its commitment to meet the aspirations of Sarawak for a more equitable and just returns from the exploitation of oil and gas and greater and more active participation by Sarawakians and Sarawak companies in the upstream and downstream sectors of the O&G industry in Sarawak.”

He added that Sarawak is the main producer of natural gas and exporter of liquefied natural gas (LNG) in Malaysia.

“Based on the statistics made available by the Statistics Department of Malaysia (April 2018), the volume of LNG exported from Sarawak is 27 million metric tons, with a total gross value of RM41.1 billion for the year 2017.

“The total crude petroleum exported from Sarawak for the year 2017 is 5.4 million metric tons, with a market value of RM9.4 billion,” he said. — DayakDaily