By Karen Bong
KUCHING, Feb 8: All the legal groundwork laid by the late Pehin Sri Adenan Satem to assert Sarawak’s rights and fair share in oil and gas resources is completely down the drain if the recently disclosed agreements between the Sarawak and federal governments regarding Petroliam Nasional Berhad’s (PETRONAS) operations in Sarawak are true.
Stampin MP Chong Chieng Jen described the situation as a major setback, marking the second time the Sarawak government has compromised and given up Sarawak’s oil and gas (O&G) rights to the federal government.
“The first instance was the passing of the Petroleum Development Act (PDA) 1974, which surrendered Sarawak’s rights over oil and gas to PETRONAS. Now, 50 years later, if Azalina’s parliamentary response is true, this would be the second let down—where the Sarawak government concedes that Sarawak laws do not apply to PETRONAS’ petroleum operations in Sarawak,” he said during a press conference at the Democratic Action Party (DAP) Sarawak headquarters this morning.
Chong was referring to a written parliamentary reply from Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said, which stated that PETRONAS and Sarawak-owned Petroleum Sarawak Berhad (Petros) had agreed on five key matters following a meeting between Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg on Jan 7, 2025.
The alleged terms of the agreement include:
- Sarawak government acknowledges and accepts the PDA 197 (Act 144) as the Federal Act governing the policy framework and operations of Malaysia’s petroleum industry.
- PETRONAS recognises Petros’ role as gas aggregator, excluding liquefied natural gas (LNG).
- PETRONAS and its subsidiary companies need not be licensed and governed by any additional procedures except those provided in Act 144.
- All commitment under the existing agreements between PETRONAS and third party, including Petros, in relation to the petroleum activities in Sarawak remain valid and applicable and shall continue without any change.
- The spirit of full cooperation between Petronas and Petros shall apply in all matters.
Chong, who is also the DAP Sarawak chairman, highlighted two critical points in the agreement that he said would severely impact Sarawak’s oil and gas rights.
First, he noted that exempting PETRONAS from licensing and regulatory procedures effectively allows the company to continue operating in Sarawak under the status quo, with only the PDA 1974 governing its operations—effectively rendering Sarawak’s own laws irrelevant.
“The late Adenan Satem had laid the legal foundation for Sarawak’s claims over its oil and gas through laws such as the Sarawak Oil Mining Ordinance (OMO) 1958, the Sarawak Land Code 1958, and the disputed validity of the federal government’s Territorial Sea Act 2012.
“But with this agreement, the Sarawak government is effectively agreeing that PETRONAS’ operations will be governed solely by the PDA 1974, meaning Sarawak’s laws will not be enforced or that Sarawak laws will be applied on PETRONAS—past, present, or future,” he stressed.
Second, Chong pointed out that Sarawak’s role as a gas aggregator is significantly weakened by the exclusion of LNG, which is the most lucrative gas product.
“Take LNG out of the control of the gas aggregator, the role of the gas aggregator is as good as not having one.
“Without LNG, what’s left for the gas aggregator to handle is mainly liquefied petroleum gas (LPG), which is the gas used in households. However, LPG is already federally subsidised to keep prices low for consumers across Malaysia, meaning there is little revenue to be gained from it,” he explained.
Given the severity and extent of damage that this purported meeting has done to Sarawak’s claim on its oil and gas rights, Chong called on Abang Johari and the Sarawak government to verify and explain their position.
“Are Azalina’s statements in Parliament a true and accurate reflection of the agreement between the Prime Minister and the Premier? If not, what was actually agreed upon?
“And if it is true, why did the Premier agree to terms that completely undermine Sarawak’s claim over its own oil and gas resources?” he questioned. — DayakDaily
