CM says not concerned about impact of new federal govt on state’s plans for oil and gas industry

Chief Minister Datuk Patinggi Abang Johari Tun Openg

KUCHING, MAY 16: Chief Minister Datuk Patinggi Abang Johari Tun Openg is not concerned about the federal government’s (under Pakatan Harapan) plans or if it will derail his own plans for the state’s oil and gas industry.

“No, I am not concerned. However, let them settle down first. Be fair to them. After that, we can talk,” Abang Johari said after attending the Sarawak Oil and Gas Industry Engagement event this morning.

While he confirmed he had met with Prime Minister Tun Dr Mahathir Mohamad and Head of Council of Eminent Persons Tun Daim Zainuddin, Abang Johari refused to disclose any details of their conversation.

In his keynote address at the engagement event, Abang Johari stressed that he made tough decisions that not every party in Sarawak would support, but which he believed are the right ones for Sarawak’s economy and the people as the state progresses towards being a Digital Economy.

“I took the measure of (securing) complete control over the granting of prospecting, exploration and mining rights within the boundaries of Sarawak as enshrined in Article 1(3) of the Federal Constitution, because it is of importance in the state’s interests and in the national interests,” he said.

Towards the end of last year, Abang Johari launched Petroleum Sarawak Bhd (Petros) and by July this year, every entity involved in the exploration and prospecting for, and mining of petroleum and the distribution of gas in Sarawak is required to comply with all state laws including those relating to the use and occupation of land, and must have licences, permits, leases and approvals under the Oil Mining Ordinance, 1958, the Gas Distribution Ordinance, 2016 and the Land Code.

He gave his assurance that national unity and the state-federal relationship will be strengthened when the rights guaranteed to the state under the Malaysia Agreement 1963 and the Federal Constitution are honoured and complied with.

“I formed Petros in order to safeguard our invaluable oil and gas resources and to develop an industry utilising these resources in a more inclusive, equitable and sustainable manner, opening up opportunities for Sarawak corporations and Sarawakians to participate meaningfully in the oil and gas industry.

“The state will also exercise its regulatory powers in a manner that would not jeopardise the interests and investments of those who have already been operating in Sarawak. The oil and gas industry should work with the government in the implementation and enforcement of our laws,” he added.

He also guaranteed that the state will be fair in enforcing the law, and conducive to improving investor confidence in the oil and gas industry.

“The state government will continuously update the federal government and its agencies on the measures taken by the state in regulating the oil and gas industry in accordance with state laws.

“The state government will not encroach into areas which are under the constitutional authority of the federal government, but will work with them and Petronas to ensure that the oil and gas industry will continue to grow in Malaysia and contribute to the economic success of the nation,” Abang Johari said.

He also believed that the industry players know well that the Sarawak state government has always been investment-friendly, and welcoming towards investments including foreign participation in its territorial waters.

He cited Shell Company Ltd as an example, which has been operating for centuries on Sarawak’s shores.

Meanwhile, Petros is expected to work alongside Petronas as co-regulators of oil and gas assets on Sarawak’s shores as well as in its continental shelf, thus including the Exclusive Economic Zone (EEZ).

Petros will not undertake exploration activities but act as a co-regulator.

It is Abang Johari’s wish to see more Sarawakian oil and gas companies to explore high value-added downstream opportunities over the longer term in a sustainable manner.

For this reason, he initiated a high value proposition last year by taking an unprecedented move to build, operate and maintain a 5,000 mtpd methanol production facility in Bintulu.

This facility is expected to be commissioned by the first quarter of 2021.

“In this proposition by the state entities, the economic spin offs and benefits to all Sarawakians and fellow Malaysian will be tremendous and overwhelming.

“All of the industry players present here this morning will need to either explore overseas markets or diversify into other domestic growth segments like speciality chemicals such as methanol derivatives and new alternative energy such as hydrogen production upon which the state is embarking.”

Concluding his keynote address, Abang Johari said: “This is the Sarawak we are forging. A state that fully grasps the possibilities of the economy of the future, and is embracing them as we speak. Transparency and efficiency will be our watchwords in both the public and the private sectors.” — DayakDaily