Sarawak wants total control over its oil and gas resources

Sharifah Hasidah Sayeed Aman Ghazali

– by Roslan Mutu

KUCHING, Oct 8: Sarawak is not demanding the 20 per cent of either royalty or profits from its oil and gas resources from Petronas as offered by State Pakatan Harapan leaders but instead wants total control over its resources as contained under the Oil and Mining Ordinance (OMO) Amendment 2018, emphasised Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali.

“What we want through the implementation of OMO Amendment 2018, is complete control over our natural resources especially oil and gas. So the issue of how much we demand from Petronas never arises,” Sharifah Hasidah told DayakDaily today.

She reiterated that OMO 1958 was enacted by the then colonial government to safeguard the oil and gas industry in Sarawak.

“OMO 1958 is part of the rights under the Malaysia Agreement 1963 (MA63) that we are now pursuing from Putrajaya, which is currently under negotiation. And we have set the deadline until end of the year.

“Of course if you ask me, I will say that we are optimistic that we will be successful in our negotiation,” she said.

The Samariang lawmaker pointed out that the amendment to the OMO 1958 that was passed in the Sarawak State Legislative Assembly last July addressed the issue of oil and gas ownership in Sarawak.

“By exercising regulatory control over the upstream activities of exploring, prospecting and mining of oil and gas in Sarawak, we are actually addressing the issue of ownership of oil and gas on and off shore Sarawak,” she said.

Petroliam Nasional Bhd (Petronas), she added, will also be regulated by OMO to conform to the Sarawak Land Code.
“With these amendments and the ensuing regulatory framework, the occupation and use of land in Sarawak by Petronas and its contractors for the exploration, prospecting and mining of petroleum could be regularised to conform to the provisions of Sections 36(2) and 209(1) of the Sarawak Land Code,” she stressed.

The amendment, she added, empowers State Minerals Management Authority (SMMA) to grant exploration or prospecting licences and mining leases for exploration, prospecting and mining of petroleum (including natural gas).

“This amendment was presented to update several provisions in OMO and to bring the Ordinance in line with current practices and operations in the upstream sector of the oil and gas industry,” she further explained.

Sharifah Hasidah said the move would encourage greater investment in the oil and gas industry in Sarawak.

“Based on feedback from the industry and other stakeholders, the investors would prefer having the option of investing in a mining activity whereby the rights to explore, prospect and mine oil can be granted in one single licence and lease,” she pointed out.

She also emphasised that the amendment would enable Sarawak to strengthen its regulatory control over the exploration and prospecting for petroleum and mining on land in Sarawak.

Under the existing provision of the OMO 1958, the granting of rights and privileges are made through the granting of an oil exploration licence, oil prospecting licence and oil mining lease.

“Because of that, new Section 33C is incorporated – to provide the state with the power to issue a single licence and lease comprising oil exploration, oil prospecting and oil mining activities.

“A new Section 8 stipulates that a licence or lease shall not be assigned or transferred without the prior written approval of Majlis Mesyuarat Kerajaan Negeri or State Cabinet,” she explained.

When these regulations are enforced, Sarawak would have much fairer and more equitable monetary returns from the exploitation of its oil and gas resources and much greater participation by Sarawakians and Sarawak companies in industry in the state.

To recap, the OMO Amendment Bill 2018 was tabled by Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan during the State Legislative Assembly setting in July.

He had also explained that the purpose of regulating the upstream activities of Petronas and its contractors was to ensure that they comply with state laws. This was to ensure the state’s resources benefited interests of the state and its people.

Awang Tengah had also revealed that according to the Statistics Department, the volume of oil and gas exported from Sarawak was 27 million metric tonnes with a total gross value of RM41.1 billion in 2017. — DayakDaily