By DayakDaily Team
KUCHING, Sept 5: Sarawak industry players have hit back at recent claims by an analyst downplaying Sarawak’s long-standing grievance over its oil and gas revenue share, stressing that the State continues to receive only 5 per cent royalty despite being Malaysia’s largest LNG producer.
According to industry insider sources, the analyst’s assertion that “PETRONAS didn’t keep 95 per cent of Sarawak’s oil and gas revenue” was misleading.
“The reality is simple: PETRONAS collects 100 per cent of the gross revenue from Sarawak’s oil and gas. Sarawak receives only 5 per cent royalty.
“The remaining 95 per cent is controlled by PETRONAS and, ultimately, the federal government. Whether it is described as profit-sharing, cost recovery, taxes or dividends is beside the point—it does not return to Sarawak,” the sources said in a statement today.
They pointed out that commercial arrangements with partners such as Shell do not alter Sarawak’s capped share.
“Decisions by PETRONAS to share profits with contractors are business choices made without Sarawak’s consent.
“Whether PETRONAS retains the profits or shares them, the outcome is the same: Sarawak remains locked into 5 per cent while 95 per cent of the wealth flows elsewhere,” they asserted.
On claims that a portion of revenue goes back to Putrajaya through taxes and dividends, the sources said those funds were channelled at the federal government’s discretion, not Sarawak’s.
“The allocations Sarawak receives are constitutional entitlements, not a gift from PETRONAS. The fact remains Sarawak has no control over its own resources while others decide how they are spent,” they added.
The rebuttal also rejected arguments that PETRONAS’ reported RM280 billion investment in upstream infrastructure was an act of generosity.
“These are necessities of resource extraction, not charity. The question is not how much PETRONAS spends, but why Sarawak receives so little in return,” they stressed.
The insiders further emphasised that Sarawak had never denied the contribution of other oil-producing states such as Sabah and Terengganu.
“The issue is fairness. Regardless of whether Sarawak contributes half, two-thirds or one-third of PETRONAS’ revenue, the reality remains—Sarawak receives only 5 per cent royalty, a figure frozen since 1974,” they said.
On the analyst’s warning that Sarawak’s licensing, zoning and conservation measures could erode investor trust, the sources described such concerns as misplaced.
“These measures are standard worldwide. Investors value clarity and fairness. What truly undermines trust are instability and broken promises, not transparent governance. Sarawak seeks fairness, not obstruction,” they said.
They also rejected calls for reaffirming the primacy of the Petroleum Development Act (PDA) 1974, describing it as a law that stripped Sarawak of its constitutional rights.
“Sarawak’s efforts through PETROS and local regulations are essential to restoring fairness. Investors thrive under systems that are stable, transparent and just—not under laws that deny states their rightful ownership,” they asserted.
The insiders concluded that Sarawak’s demands were neither excessive nor unreasonable.
“We are not greedy or unscrupulous. We are demanding fairness, transparency and respect for Sarawak’s rights under the Malaysia Agreement 1963 (MA63).
“Until that is honoured, no amount of technical explanation can hide the central truth: Sarawak deserves more than 5 per cent of its own wealth,” they said. – DayakDaily
