Federal Court dismisses Petronas’ bid to challenge Sarawak for control of petroleum activities

Abang Johari thanking the Sarawak legal team and all Sarawakians for standing solidly behind the government in its fight against Petronas. — screenshot from Facebook

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KUCHING, June 22: The Federal Court today struck out Petronas’ application to have exclusive right over oil and gas resources in Sarawak.

Chief Judge of Malaya Tan Sri Datuk Wira Ahmad Maarop, in dismissing the application, held that the declaration sought by Petronas did not come within the ambit of Article 4 (4) of the Federal Constitution.

When contacted, Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali said the implication of the case was that now Sarawak could enforce its Oil Mining Ordinance (OMO) 1958, which required the national oil giant to obtain licence from Sarawak to operate here come July 1, 2018.

Meanwhile, a press statement from the Chief Minister’s office today said that the Federal Court’s decision paved the way for Sarawak to enforce its laws from July 1, 2018, like what Chief Minister Datuk Patinggi Abang Johari Tun Openg announced earlier this year.

“Our Chef Minister would like to thank our legal team and all Sarawakians for their solid support and prayers for Sarawak to exercise its constitutional rights related to oil and gas activities in Sarawak. Petros (Petroleum Sarawak Berhad) will be delegated with the appropriate powers to implement Sarawak’s OMO,” said the statement.

The Sarawak legal team was led by attorney-general Datu Talat Mahmood Abdul Rashid and legal counsel Dato Sri JC Fong, while Petronas was represented by lawyer Datuk Malik Imtiaz Sarwar.

Petronas had sought a declaration that the Petroleum Development Act (PDA) 1974 applies with regards to the regulatory control of upstream activities in Sarawak and that the Sarawak OMO was impliedly repealed by PDA.

In its court filing, Petronas sought a stay order in respect of the Sarawak government’s commencement to regulate upstream activities in the state under OMO 1958 beginning July 1 this year. Petronas was required to comply with the OMO and must have the requisite licences or leases, failing which the upstream activities carried out by Petronas would be illegal and appropriate action would be taken.

Petronas was seeking a declaration that the PDA was duly enacted by Parliament and that Petronas is the exclusive regulatory authority for the upstream industry throughout Malaysia, including in Sarawak.

However, Sarawak argued that the OMO 1958 is a law where the Sarawak state legislature had the legislative authority to regulate the granting of oil prospecting licences, oil exploration licences and oil mining leases.

Therefore, the state of Sarawak has the executive authority over the permits and for prospecting for mines and over mining leases and certificates.

The hearing was supposed to be held on June 12 but was postponed to June 21 due to a request made by the Federal attorney-general to enable him to consider whether the federal government ought to intervene in the case. — DayakDaily