More oil, gas exploration could extend state reserves by 20 years

Fong and Sharifah Hasidah at the press conference.

By Peter Sibon and Karen Bong

KUCHING, Oct 9: Sarawak’s current oil and gas reserves could last another two decades provided more explorations are carried out, opined State Legal Advisor Datuk Seri JC Fong.

He said efforts are now being made to explore more oil and gas resources in the western parts of Sarawak especially the offshore areas of Balingian.

“Currently, Sarawak contributes 60 per cent of LNG (liquefied natural gas) and 25 per cent of oil production to the national economy,” he told a press conference at the State Legislative Assembly (DUN) complex here today.

Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali was present.

The state legal counsel was responding to reports that without further explorations, Sarawak’s oil and gas reserves would only last 10 years, based on the annual production rate.

Fong pointed out that Sarawak contributes significantly to the national gross domestic product (GDP) for the current fiscal year and currently, it was the third highest contributor after Selangor and Penang.

“However, if oil and gas is taken away, then we (Sarawak) are at the bottom three,” he said, while referencing Chief Minister Datuk Patinggi Abang Johari’s recent remark that GDP does not reflect the real income of Sarawakians.

“Yesterday (at a Business Engagement Session event), I said that State Sales Tax (SST) will yield Sarawak RM3 billion. Now assuming the federal government will give us RM3 billion, if Petronas pays to us.”

He questioned what is RM3 billion to the federal government when the federal revenue for this fiscal year (2019) is at RM231 billion, according to a report published in The Edge last week.

“So, if the federal government were to sacrifice RM3 billion for the state’s SST, that amounts to less than 1.5 per cent of the federal revenue for this year. In percentage term, it is so small but I heard somebody said our claim is unreasonable,” he said.

Fong reminded that Sarawak has contributed some RM660 billion to the national coffers over the years in oil revenue, which exclude LNG’s profit of RM40 billion annually.

“We only get RM33 billion of that RM660 billion. So, we must go back to the ‘Shared Prosperity Vision’ (2030) and if you (federal) have RM231 billion, why not give us RM3 billion more. That is surely is shared prosperity in regional basis,” he said.

When asked what is Sarawak government’s next course of action if Petronas refused or unable to pay the five per cent sales tax by the end of the month, he quipped: “We shall see, the ball is now in their court.”

However, he added that the chief minister was confident that Petronas will pay.

Fong said that Sarawak government, in its negotiation with Petronas, has given them three options to solve the problem they were facing. He declined to reveal the suggested options as the issue was still under negotiation.

“Petronas said SST will affect the profit and dividend to be given to the federal government. So they are sorting things out with the federal government as Petronas said they needed the federal government to okay (for them) to pay,” he continued.

“They are not like what Prof Dr Shad said. They are saying they can pay. In fact, they came over to see us to ask that we don’t sue them, as they are waiting for instructions from its shareholders,” he said.

“They met our controller of sales tax, director of SPU (State Planning Unit), they met me and State Attorney General Chambers. They asked us how to solve the problem. They wanted us to support them,” he added. — DayakDaily