Sarawak neither surrendering its O&G rights nor giving in to Petroleum Act

Abang Johari speaking at the symbolic handing over of 10,500 boxes of “Sumbangsih Raya-Gawai" cookies to frontliners working during the Covid-19 pandemic.

Nancy Nais

KUCHING, May 14:  Sarawak has neither surrendered its rights on oil and gas to Petroleum Nasional Berhad (Petronas) nor giving in to Petroleum Development Act (PDA).

Chief Minister Datuk Patinggi Abang Johari Tun Openg said Sarawak’s oil and gas is regulated by the Oil Mining Ordinance 1958 (OMO 1958).

“That Petroleum Development Act (PDA 1974) applies in other states in Malaysia, but here in Sarawak, we are governed by the Oil Mining Ordinance 1958 (OMO 1958).

“As I have said before, we have the rights to our oil and gas. That was why we went to the court and the court has ruled that we have the right over these matters,” said Abang Johari.


Responding to criticism over the recent RM2 billion settlement between the Sarawak and Petronas, Abang Johari said there is a new arrangement currently being negotiated.

“The negotiation will have to go through the state legislative assembly consultative committee. The committee has just been formed by the new government so we have to negotiate first,” he said after the symbolic handing over of 10,500 boxes of “Sumbangsih Raya-Gawai” cookies to frontliners working during the Covid-19 pandemic.

Last week, in a joint press statement issued by the Assistant Minister of Law, State-Federal Relations Datuk Sharifah Hasidah Sayeed Aman Ghazali and Petronas Chairman Datuk Ahmad Nizam Salleh, both the Sarawak Government and Petronas have reached an amicable settlement of five per cent SST on petroleum products in Sarawak.

“Both parties have agreed that the best approach to achieving a common solution is through commercial solutions by creating a more stable business and investment environment.

“Following the withdrawal of all legal proceedings, Petronas through its subsidiaries, will make full payment of the SST imposed by the Sarawak Government on petroleum products for 2019 amounting to RM2 billion at five per cent of SST on the sales of the oil and gas products,” the statement said.

The statement pointed out that Sarawak government and Petronas have agreed that taxation for petroleum products under the SST (Taxable Goods and Rate of Tax (Amendment) (No.2) (Order 2018) be subjected to fluctuation based on decisions made during future negotiations.

In the statement, it was also stated that all agreements and correspondence have been agreed between the Sarawak government and Petronas wherein PDA74 remains in force.

According to the statement, it was agreed that Petronas will continue to be recognised as the country’s oil and gas company which has full control in regulating the whole development of the oil and gas industry in accordance with the Federal Constitution.

This statement had drawn flaks from local political leaders and NGOs. — DayakDaily