By DayakDaily Team
KUCHING, Jan 27: The Malaysia Agreement 1963 (MA63) grants Sabah and Sarawak broader autonomy as founding partners of Malaysia but does not contain any provisions governing the ownership, management or regulation of oil and gas resources, said Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said, according to The Edge Malaysia.
Azalina said MA63 is a foundational document that sets out the terms for the formation of Malaysia, including specific rights and safeguards for Sarawak and Sabah, but does not address oil and gas matters.
“However, MA63 does not contain provisions relating to the ownership, management or regulation of oil and gas resources, nor does it define the roles of petroleum entities such as Petroliam Nasional Bhd (PETRONAS) or Petroleum Sarawak Bhd (Petros),” she said in a written parliamentary reply on Monday (Jan 26).
She was responding to a question from Saratok Member of Parliament Datuk Ali Biju (PN-Saratok), who sought clarification on the federal government’s position on Sarawak’s territorial sea claims and how MA63 negotiations address overlapping authority between Petros and PETRONAS.
According to The Edge Malaysia, the clarification comes amid an ongoing dispute between PETRONAS and Petros over oversight of gas assets in Sarawak, which holds more than 40 per cent of Malaysia’s gas reserves.
At the centre of the dispute is Petros’ claim to rights as the sole gas aggregator under the state’s Distribution of Gas Ordinance (DGO), while PETRONAS maintains that its authority under the federal Petroleum Development Act 1974 (PDA) supersedes state legislation.
Sarawak has consistently maintained that its rights over oil and gas are guaranteed under MA63, the Federal Constitution and its own state laws, which it says were never repealed after Sarawak and Sabah joined Malaya to form Malaysia. Putrajaya, however, maintains that PETRONAS holds management rights over oil and gas resources under the PDA.
Sarawak further argues that the PDA was enacted during the emergency period without the state’s consent and that its own laws, particularly the Oil Mining Ordinance (OMO) 1958, therefore take precedence. The 2021 amendments to the Federal Constitution recognising MA63 have also been cited as providing a stronger legal foundation for Sarawak to demand the return of its powers over its own resources.
MA63 has long been a contentious issue between the federal government and the governments of Sabah and Sarawak, particularly on matters relating to autonomy and special privileges.
According to The Edge Malaysia, efforts to resolve the impasse included a joint declaration signed in May last year by Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg recognising both the PDA and the DGO.
However, negotiations between PETRONAS and Petros have since reached a deadlock, with no breakthrough to date. This led PETRONAS earlier this month to file a case at the Federal Court seeking a determination on the legal position of its operations in Sarawak, naming the federal government and the Sarawak state government as respondents.
Several lawmakers from Gabungan Parti Sarawak (GPS) have voiced dissatisfaction and called on the federal government, as PETRONAS’ shareholder, to clarify whether the legal action was taken at Putrajaya’s instruction.
Azalina said that as the dispute is now before the courts, the federal government respects the independence of the judiciary and will abide by the court’s decision.
She reiterated that PETRONAS is vested with full ownership of petroleum resources under the PDA, including exclusive rights, powers and privileges to explore, exploit, obtain and produce petroleum both onshore and offshore in Malaysia.
Azalina added that while ownership and management rights over petroleum remain with PETRONAS, a Commercial Settlement Agreement signed between PETRONAS and the Sarawak government on Dec 7, 2020, provides for strategic cooperation between PETRONAS and Petros.
The agreement covers activities across both the upstream and downstream segments of the oil and gas sector and was designed to facilitate greater participation by Petros in the oil and gas value chain, she said. — DayakDaily
