Sarawak capable of growing and managing own O&G resources

Sharifah Hasidah delivering her keynote address at the forum organised by SPG.

By Adrian Lim

KUCHING, Feb 1: Sarawak has the capability to build up its own oil and gas (O&G) resources and manage them in order to generate more revenue for the benefit of its people and the future.

Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Datuk Sharifah Hasidah Sayeed Aman Ghazali believed that there was vast potential that the state government could explore together with industry players to create a win-win situation in the development of the O&G industry in Sarawak.

“I believe with proper allocation of our own O&G resources, Sarawak will definitely be in a much better position economically to further develop ourselves and attain a high income economy in the year 2030.

“The Sarawak government stands firm and resolute as well as strategically managing ourselves the situation and properly managing Sarawak petroleum resources for the benefit of present and future generations of Sarawakians,” Hasidah said at a forum organised by Suarah Petroleum Group Berhad (SPG) called “Seeking Economy Parity for Future Generations, Fight for Our Rights, Fight it Right” at the Sarawak State Library today.

She revealed that the state government was currently seeking more financial resources from Petroliam Nasional Berhad (Petronas) through the imposition of 5 per cent of the State Sales Tax (SST) for exported petroleum products.

In the meantime, Sharifah Hasidah also highlighted that the Oil Mining Ordinance (OMO) 1958 and the Sarawak Land Code were two crucial laws that would determine the state’s rights to its O&G resources.

On gas resources, Sharifah Hasidah said the new Gas Distribution Ordinance 2016 in Sarawak would provide the regulation and the framework for the expansion of the gas supply industry in the state.

Thus, she opined that it was in Sarawak’s best interest, adding that it must be regulated by the Sarawak government to facilitate its industry development.

Sharifah Hasidah pointed out that the law must be adhered to by all those involved in the gas production, processing, supply and distribution in Sarawak.

On another note, she observed that the country’s entire natural gas reserves were estimated at 100.66 trillion standard cubic feet in 2014.

She noted that out of that huge amount of gas reserves, 51.97 trillion standard cubic feet, or 51.6 per cent of it, lies within the territorial waters of Sarawak.

Therefore, Sharifah Hasidah believed the the large amount of gas reserves provided great potential for the industrial development in Sarawak.

In spite of the big amount of gas reserves, she observed that the gas pipeline was substantially shorter compared to those in Peninsular Malaysia.

She stated that Sarawak gas’ pipeline network was just a mere 45 kilometres in contrast to the 2,623 kilometres of gas pipeline in Peninsular Malaysia.

Hence, she opined that if Sarawak’s industrial development was to catch up with the rest of Malaysia, the state’s gas pipeline and distribution infrastructure must be developed and expanded to a much larger extent with proper rules and regulations.

She recalled that between 1997 and 2014, Petronas’ gas subsidies mainly to Peninsular Malaysia had reached a total of RM230.6 billion, at least RM100 billion of which was potentially contributed by Sarawak.

Instead of contributing those subsidies to Peninsular Malaysia, Sharifah Hasidah pointed out that it was now time for Sarawak to use its gas reserves for the state’s own industrial development and local consumption.

She further stated that local gas distribution and consumption in Sarawak had for many years been available and limited to just Miri.

As a result, she noted industries were unable to enjoy or benefit from lower cost of energy and in turn provide lower prices of goods and services to consumers in Sarawak.

Therefore, she pointed out that the development of the gas reticulation system for the whole of Sarawak through efficient utilisation of the state’s own gas resources was long overdue.

In the meantime, she stressed that Sarawak had the capacity to undertake large scale industrial projects and supported the development of all sectors of O&G industry including exploration, development, production of crude oil and natural gas as operated by Petronas and its contractors.

With that, she believed it would lead to a multiplier effect for the industries and businesses in Sarawak as well as the economic development of the state.—DayakDaily