CM to address Sarawak rights, O&G demand in Budget speech

The Sarawak Legislative Assembly complex.

By Peter Sibon

KUCHING, Nov 1: Datuk Patinggi Abang Johari Tun Openg will address all negotiations on outstanding issues concerning the state’s rights, particularly on oil and gas matters under the Malaysia Agreement 1963 (MA63), in his budget speech.

According to sources, even though the deadline for all negotiations regarding the pertinent issues ended yesterday (Oct 31), the Sarawak Consultative Committee on MA63 will let the chief minister address them in the state Budget 2020 speech at the Sarawak Legislative Assembly (DUN) sitting starting Monday (Nov 4).

“Among the issues that will be addressed is the 5 per cent State Sales Tax (SST) imposed on oil companies which operate in Sarawak,” the source said.

It has been revealed recently that all oil companies operating in the state have paid their SST except Petronas.


Initially the national oil company was given until end of September this year to comply but the Sarawak Technical Committee decided to postpone it to a new deadline, which was set on Oct 31.

On Sept 13, chairman of the Sarawak Consultative Committee on MA63, Datuk Amar Mohd Asfia Awang Nassar, who is also Sarawak DUN speaker, said many outstanding issues were expected to be addressed during the negotiation period.

Last month, State Legal Advisor Datuk Seri JC Fong had told a press conference that Sarawak was demanding the 5 per cent SST on all oil companies operating in Sarawak, and that all have paid except Petronas.

Fong had said that the state government demanded Petronas to pay the SST, as it was based on its right.

He also clarified that the state was not trying to pick up a fight against Petronas and the federal government.

“We are not even asking for 20 per cent oil royalty. We are not asking for something extraordinary. We are only asking for something very reasonable,” Fong said at the media conference on Oct 9.

He reiterated that Sarawak was also looking forward to have an active participation in the oil and gas industry in Sarawak.

Fong said the state was asking for a fairer share of the oil and gas revenue derived from production in Sarawak and more opportunities in LNG plant. The state government was looking for share based on arm’s length transaction.

“We are asking for share in those oil production areas belonging to Petronas Cargali. We are not talking about other oil companies,” he was reported as saying.

Fong added that the second request was for Sarawakians to become active participants in the oil and gas downstream activities. — DayakDaily